Bank Balance Sheets
Definition
Bank balance sheets provide a snapshot view of a bank's financial position at a specific point in time. They show assets (such as loans and investments) on one side and liabilities (such as customer deposits) and capital on the other side.
Analogy
Think of a bank balance sheet as a personal financial statement. Just like you would list your assets (like cash, investments) and liabilities (such as loans, credit card debt), a bank's balance sheet shows what it owns and owes.
Related terms
Assets: Resources owned by a bank, including cash, loans, investments, and property.
Liabilities: Obligations or debts owed by a bank to its customers or other institutions.
Capital: The difference between a bank's assets and liabilities, representing the net worth or equity of the institution.
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