Bank story

Here are a couple of interesting bank-related stories from expert discussions:

The Role of Commercial Banks

Commercial banks act as intermediaries between savers and borrowers. They take deposits from people who have extra money and lend it out to those who need it, like someone buying a house. The banks profit by charging slightly more interest on loans than they pay on deposits. This basic intermediary role keeps things simple, but competition among banks keeps interest spreads small and ensures they cover their costs plus a little profit. However, this simplistic view is not the whole story of how banks operate today 1.

Citibank's Criminal Connections

Citibank has faced accusations of failing to comply with anti-money laundering (AML) regulations, allegedly becoming a preferred bank for criminals, including Mexican drug cartels. In one instance, operatives related to the Sinaloa cartel made a series of deposits below $10,000 to avoid triggering automatic alerts to authorities. This story illustrates how banks play a pivotal role in either blocking or enabling criminal activities through financial transactions and the importance of diligent AML practices 2.