About Me
Social Studies for Grade 4
1 Introduction to Social Studies
1-1 Definition and Scope of Social Studies
1-2 Importance of Social Studies in Daily Life
1-3 Basic Concepts in Social Studies
2 History
2-1 Early Civilizations
2-1 1 Mesopotamia
2-1 2 Egypt
2-1 3 Indus Valley
2-1 4 China
2-2 Ancient Greece and Rome
2-2 1 Greek Civilization
2-2 2 Roman Civilization
2-3 Medieval Period
2-3 1 Feudalism
2-3 2 The Crusades
2-4 Renaissance and Reformation
2-4 1 Renaissance Art and Culture
2-4 2 The Reformation
2-5 Exploration and Colonization
2-5 1 Age of Exploration
2-5 2 European Colonization
2-6 Modern History
2-6 1 Industrial Revolution
2-6 2 World Wars
2-6 3 Cold War
3 Geography
3-1 Earth and Its Features
3-1 1 Continents and Oceans
3-1 2 Mountains, Rivers, and Deserts
3-2 Climate and Weather
3-2 1 Types of Climate
3-2 2 Weather Patterns
3-3 Human Geography
3-3 1 Population Distribution
3-3 2 Urbanization
3-3 3 Migration
3-4 Natural Resources
3-4 1 Renewable Resources
3-4 2 Non-Renewable Resources
3-5 Environmental Issues
3-5 1 Pollution
3-5 2 Conservation
4 Civics
4-1 Government and Governance
4-1 1 Types of Government
4-1 2 Functions of Government
4-2 Rights and Responsibilities
4-2 1 Citizenship Rights
4-2 2 Duties of Citizens
4-3 Laws and Justice
4-3 1 Legal Systems
4-3 2 Courts and Judiciary
4-4 Democracy
4-4 1 Principles of Democracy
4-4 2 Electoral Process
4-5 International Relations
4-5 1 United Nations
4-5 2 Global Cooperation
5 Economics
5-1 Basic Economic Concepts
5-1 1 Needs and Wants
5-1 2 Goods and Services
5-2 Production, Distribution, and Consumption
5-2 1 Factors of Production
5-2 2 Supply and Demand
5-3 Money and Banking
5-3 1 Functions of Money
5-3 2 Banking System
5-4 Global Economy
5-4 1 Trade and Commerce
5-4 2 Economic Systems
5-5 Economic Challenges
5-5 1 Poverty
5-5 2 Unemployment
6 Social and Cultural Studies
6-1 Family and Community
6-1 1 Family Structures
6-1 2 Community Roles
6-2 Cultural Diversity
6-2 1 Multiculturalism
6-2 2 Cultural Heritage
6-3 Social Institutions
6-3 1 Education
6-3 2 Religion
6-3 3 Media
6-4 Social Issues
6-4 1 Gender Equality
6-4 2 Human Rights
6-5 Global Citizenship
6-5 1 Intercultural Understanding
6-5 2 Global Challenges
5-3 2 Banking System Explained

5-3 2 Banking System Explained

Key Concepts

5% Reserves

5% Reserves refer to the amount of money that banks must keep on hand to cover potential withdrawals by customers. This reserve requirement is set by central banks to ensure that banks have enough liquidity to meet their obligations. Keeping 5% reserves helps prevent banks from running out of cash and ensures financial stability.

Imagine 5% reserves as a safety net for a circus performer. Just like the performer needs a net to catch them if they fall, banks need reserves to catch them if they face sudden withdrawals.

3% Capital

3% Capital refers to the amount of equity that banks must maintain to cover potential losses from loans and investments. This capital requirement is also set by central banks to ensure that banks can absorb losses without becoming insolvent. Keeping 3% capital helps protect both the bank and its customers.

Think of 3% capital as a cushion for a chair. Just like a cushion makes the chair more comfortable and safer to sit on, capital makes the bank more stable and safer for customers.

2% Liquidity

2% Liquidity refers to the amount of easily accessible funds that banks must maintain to meet short-term obligations. This liquidity requirement ensures that banks can quickly convert assets into cash if needed. Keeping 2% liquidity helps banks manage their cash flow and avoid financial crises.

Imagine 2% liquidity as a water bottle for a hiker. Just like the hiker needs water to stay hydrated, banks need liquidity to stay solvent and meet their short-term needs.

Banking System

The Banking System is a network of financial institutions that provide various services such as accepting deposits, making loans, and facilitating transactions. The banking system plays a crucial role in the economy by providing the necessary infrastructure for financial activities. The 5-3 2 rules are designed to ensure the stability and reliability of this system.

Think of the banking system as a highway network. Just like highways connect cities and facilitate transportation, the banking system connects people and businesses and facilitates financial transactions.

Financial Stability

Financial Stability refers to the overall health and resilience of the financial system. It ensures that the banking system can withstand shocks and continue to function smoothly. The 5-3 2 rules contribute to financial stability by setting minimum requirements for reserves, capital, and liquidity, which help protect the banking system from risks.

Imagine financial stability as a strong foundation for a house. Just like a strong foundation keeps the house stable, financial stability keeps the banking system stable and resilient to shocks.

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