Banks and risk GapFill

Banks provide a number of important services to consumers and firms. Primarily they are an intermediary between lenders and  creditborrowerssaversenterprise. Money that some customers choose to save is channelled towards loans that other customers have chosen to take out. In this way, banks provide  collateralcreditriskenterprise to individuals and firms. This is crucial for  creditriskenterprisecollateral, particularly in the early stages of setting up a business, as upfront costs tend to be high. It can also help to maintain  interest ratescollateralriskcash flow at critical moments in the evolution of a business.   

Banks incentivise saving and are rewarded for offering out loans through the use of  collateralinterest ratescash flowrisk. This is a transfer of money from the benefactor of the loan to the facilitators: both the bank and the  clerkborrowergovernorsaver. Borrowers may also offer  collateralinterest ratescash flowrisk to the bank to secure their loan. This means they are liable to lose an asset if they are unable to repay their loan in the specified time. As such,  collateralcash flowriskenterprise is a fundamental part of borrowing, and borrowers need to be confident that they can keep up with repayments.