Acton Institute Powerblog

What do banks do?

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Note: This is post #88 in a weekly video series on basic economics.

Borrowing and saving plays an essential role in our economy, and banks often serve as their primary link. But how exactly do banks operate?

In this video by Marginal Revolution University, Alex Tabarrok explains how banks serve as financial intermediaries, how they turn savings into loans, and how they make loans as productive as possible.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Click here to see other videos in the Introduction to Economics series.

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Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

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