Introduction

In recent years, the field of money, banking, and financial markets has become one of the most exciting in all of economics. Financial markets are changing rapidly, with new financial instruments appearing almost every day; the once staid banking industry is now highly dynamic is continually featured in the media as a result of the crisis in the savings and loan and commercial banking industries; well founding international markets and trade an integrated world economy in which events in one country’s financial markets have major impact on financial markets in other countries; the conduct of monetary policy is at center stage in debates about economic policy; and new developments in monetary theory have changed the way we think about the role of money in the economy .
Banks are financial institutions that accept deposits and make loan included in the term banks are such firms as commercial banks, saving and loan associations, mutual saving banks and credit unions. The banking industry has been much news lately. Failures of commercial banks have been running at the highest rates since the great depression and the saving and loan industry has required a massive bailout, costing taxpayers $100 billion. Banks are important to our study of money and the economy because:
1- They provide a channel for linking those who want to save with those who want to invest.
2- The pay an important role in determining the quantity of money in economy.
3-they have been one source of rapid financial innovation that is currently expanding the ways that we can invest our saving.