Often the banker's concept of the role of commercial banks in economy shapes the nature and character of his bank. The deposit-minded banker may stress conservatism and liquidity; the loan-minded banker may underemphasize safety. Their attitudes often reflect the nature of the locality in which their banks operate; conservatism is frequently the mark of the stable, long-settled community, and more aggressive banking is found where growth is rapid and the need for credit is greatest.
Actually, commercial banks perform a number of interrelated functions, many of which are necessary parts of our private, free enterprise system. Commercial banks bring into being the most important ingredient of the money supply- demand deposits-through the creation of credit in the form of loans and investments. Banks are the custodians of the community's money as well as the suppliers of its liquidity. For those bank customers who seldom borrow, the depository function may be the most important. Commercial banks also provide flexibility and mobility to the money supply by maintaining the interchangeability of currency and bank deposits and by providing the mechanism through which money payments can be most speedily and efficiently made. Commercial banks participate with other institutions in the process of accumulating and investing savings and perform a number of other services.
