Bank finance articles and tips

Republican presidential candidates are fighting it out to get the nomination to face the incumbent president, Obama in the 2012 polls. Some of the policies they are pegging towards their nomination are their zeal to have the taxes for the wealthy cut, but doing so might plunge the country into deeper national misery. This is according to a study report to be published in the upcoming issue of Psychological Science.

According to the study, countries with more progressive tax policies, which highly tax the rich than the poor, are said to have happier citizens than those with a flatter tax rates. The difference in their satisfaction with the nation's public services might be the reason for the varied happiness levels, says the study. Public transportation, housing, schools and other public services offered in the countries in progressive taxes seem to please the citizens than the same services offered in countries with flatter tax rates....

The financial sector provides six major functions that are important both at the firm level and at the level of the economy as a whole.

1. Providing payment services. It is inconvenient, inefficient, and risky to carry around enough cash to pay for purchased goods and services. Financial institutions provide an efficient alternative. The most obvious examples are personal and commercial checking and check-clearing and credit and debit card services; each are growing in importance, in the modern sectors at least, of even low-income countries.

2. Matching savers and investors. Although many people save, such as for retirement, and many have investment projects, such as building a factory or expanding the inventory carried by a family micro enterprise, it would be only by the wildest of coincidences that each investor saved exactly as much as needed to finance a given project. Therefore, it is important that savers and investors somehow meet and agree on terms for loans or other forms of finance. This can occur without financial institutions; even in highly developed markets, many new entrepreneurs obtain a significant fraction of their initial funds from family and friends. However, the presence of banks, and later venture capitalists or stock markets, can greatly facilitate matching in an efficient manner. Small savers simply deposit their savings and let the bank decide where to invest them.