The previous three answers are incorrect. Investors fund a bank by buying stock. That is how a bank raises capital.
Depositors provide liquidity to a bank. That liquidity is needed to make loans to other customers. But, deposits are not assets - they are actually liabilities to a bank.
TROY - You are so completely mistaken on all your assumptions I don't even know where to start in disputing your claims. But here's one. A bank can raise additional capital by selling stock, selling assets or getting aid from the government, such as with TARP, which is a recent and fairly unprecedented phenomenon.
You will never get the right answer to your question. A few simple and confusing answers to your question are:
1-Bank has the ability to fund itself (do your own research on this)
2-Bank can fund itself by earning interest on money that it never had (do your own research on this as well)
3-Bank can fund itself by taking away a chunk of you money when you, for example:
deposit money in your account
withdraw money out of your account
4-(My Favorite) when you run of out of money, then it becomes absolutely necessary for you to pay the bank some money because you ran of your personal money.
As of recently our government has been a huge source of funding for many banks.
corporations and people fund the bank. When we put our money into an account; the bank borrows and uses our money for other corporations...we will never know it however.
Depositors
