Banks are vital to the U.S. economy for several
reasons. It is through banks where
people can borrow money to invest in a business that would help generate income
and employment and this leads to improvement of the U.S. economy. They enable business to spend more than their
limit and give liquidity requirements when the need for it arises. They also help individuals and business indirectly
participate in global markets as well as promote entrepreneurship and help
develop the economy.
The U.S. government affects how banks do business
through regulations and policies. One
example is the Economic Recovery Act of 2008 that reinforced the American
economy and helps avert the foreclosure of homes through development programs
and debt counseling.
