How do banks mediate between those who have surplus money and those who need money?

Question: How do banks mediate between those who have surplus money and those who need money?

Banks act like middlemen in the economy. They take deposits from people who have extra money (savers) and lend it to those who need funds (borrowers). Savers earn interest on their deposits, while borrowers pay interest on loans. This process helps money flow efficiently in the economy, supporting personal spending, business growth, and overall economic stability.

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