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In chapter 1 of the textbook, Financial Institutions Management: A Risk Management Approach, 8th edition, the case is made that commercial banks and other depository institutions are “special” types of financial institutions deserving of special consideration under the law and special prudential regulation not afforded other private companies. “Specialness” is derived from a number of characteristics of banks and the banking system stemming from these institutions’ liabilities being mainly deposits of the public and usually considered the most liquid assets of the public as part of the economy’s money supply and making loans to individuals, companies (small and large) and providing funds to governments. Make the case for “specialness” as discussed.

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