U.S. Financial Institutions

Glossary

• bank charter - An operating license issued to a bank by the federal government or a state government; required for a commercial bank to do business.
• commercial banks - Profit-oriented financial institutions that accept deposits, make business and consumer loans, invest in government and corporate securities, and provide other financial services.
• credit unions - Not-for-profit, member-owned financial cooperatives.
• financial intermediation - The process in which financial institutions act as intermediaries between the suppliers and demanders of funds.
• pension funds - Large pools of money set aside by corporations, unions, and governments for later use in paying retirement benefits to their employees or members.
• thrift institutions - Depository institutions formed specifically to encourage household saving and to make home mortgage loans.