Banking Capital

Banking Capital

 

(1) The aggregate of money capital (bank resources) with which capitalist banks operate; these resources make up the entire sum of the liabilities of their balance. Banking capital includes the bank’s own means (joint-stock capital, reserves, and the capital owned by the banker) and attracted means (in deposit or commercial banks, these would be deposits of industrial enterprises; in long-term investment banks, bank or mortgage bonds; and in savings banks, small deposits).

(2) The banks’ own capital, which consists for the banker (or banking house) of the means which belong to him and which, for joint-stock banks, consists of the receipts from the floating of bank shares. Banking capital brings its holder banking profit, the profit norm of which is equal to average profit in the economy as a whole, just as is the case with industrial and commercial profit. Thus, banking capital is functioning entrepreneurial capital, as distinguished from loan capital—capital as property. Under premonopolistic capitalism, banking capital kept itself apart from industrial capital and serviced the latter through short-term credit and accounting transactions. In the era of imperialism, monopolistic banking capital is intertwined with monopolistic industrial capital; as a result, financial capital is formed.