Finance is a term for matters regarding the management, creation, and study of money and investments.Specifically, it deals with the questions of how and why an individual, company or government acquires the money needed – called capital in the company context – and how they spend or invest that money.  Finance is then often split per the following major categories: corporate finance, personal finance and public finance.

At the same time, and correspondingly, finance is about the overall "system" – i.e., the financial markets that allow the flow of money, via investments and other financial instruments, between and within these areas; this "flow" is facilitated by the financial services sector. A major focus within finance is thus investment management – called money management for individuals, and asset management for institutions – and finance then includes the associated activities of securities trading and stock broking, investment banking, financial engineering, and risk management.

A bank is a financial institution that accepts deposits from the public and creates a demand deposit, while simultaneously making loans. Lending activities can be performed either directly or indirectly through capital markets.

Due to the importance of banks in the financial stability of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional reserve banking, under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards.