Bank Capital, capital concentrated in specific capitalist enterprises—the banks— and consisting of the bank’s own monetary means (the smaller part of bank capital) and borrowed means accumulated in bank deposits from the temporarily free money of active capitalists, of public and other organisations, and of working people. The basic function of bank capital, irrespective of the specialisation of any particular bank, is the use of the accumulated monetary resources for loans to active capitalists in the hope of extracting bank profit—one of the transformed forms of the surplus value created by wage labour in material production. This function is 24 carried out through the activities of the banks, which are subdivided into passive— linked to the formation of bank reserves— and active, charged with distribution and use of these reserves. Bank profit is accrued from the difference between the higher interest rates which the bank charges for active operations, and the lower rates which it pays for passive operations. Before the era of imperialism the major trend in the movement of bank capital was as an intermediary in payments. However, as capitalism evolved into monopoly capitalism the concentration and centralisation of bank capital has intensified, and bank monopolies have emerged which try to dictate terms to the active capitalists. The banking institutions possess large folios of shares of industrial and other companies. A gradual coalescence of monopoly bank and monopoly industrial capital is taking place. On this basis a qualitatively new phenomenon in the development of capitalism is being formed: finance capital and financial oligarchy.