RE: What is commercial bank and central bank?
the fee it is adjusted with the aid of the significant financial organization, such because of the fact the Federal Reserve, is the fee used in the pass of money between advertisement banks and that significant financial organization. whilst it is adjusted, advertisement banks will regulate their fees for this reason. to illustrate, a advertisement financial organization could lend money at 5% excessive cost (cost set with the aid of the significant financial organization). If the significant financial organization will enhance the top cost from shall we say 2.5% to 3%, then the financial financial organization might develop its interest cost from 7.5% to eight% so as that they nevertheless get the comparable proportion of interest on money lended to its clientèle. Thats how banks make salary, from expenses and interest.