A bank's business is to turn its liabilities into assets.

Name: A bank's business is to turn its liabilities into assets.
Brand: Quizplus
Rating: 4.8 (51 reviews)

Question

Quizplus · Accepted Answer

This statement is true. Banks collect deposits from customers and use those funds to make loans, which are assets for the bank. The interest earned on loans is greater than the interest paid on deposits, resulting in a profit for the bank. Essentially, banks turn their liabilities (deposits) into assets (loans).

A Bank's Business Is to Turn Its Liabilities into Assets