S6 Economics: Money and Banking – Commercial, Central and Development Banks Notes

These Senior Six Economics notes continue the Money and Banking topic. They define a bank and describe the main types: development, central, specialised, savings and commercial banks, with examples from Uganda. The notes list the functions of commercial banks and their role in development, then weigh the benefits and drawbacks of foreign commercial banks. They also cover the problems commercial banks face in developing countries, ways to improve the sector, and the features of Ugandan banks. Further sections explain bank assets and liabilities and how banks balance liquidity, profitability and security. The notes end with credit creation, covering its assumptions, the credit multiplier, cash and reserve ratios, and a worked step-by-step example.