What defines a bank?

A bank is defined primarily as a financial institution that is licensed to receive deposits from customers. This function allows banks to hold funds that can be used for various purposes, such as providing loans to individuals and businesses, offering checking and savings accounts, and facilitating transactions. The ability to accept deposits is a fundamental characteristic that distinguishes banks from other types of financial entities.

The other options present different types of financial and regulatory organizations. An organization that invests only in stocks does not engage in the core banking activities of accepting deposits and providing loans. A company that provides insurance services operates in the insurance sector, which is entirely separate from banking functions. Lastly, a government agency that regulates financial markets serves an oversight role, ensuring compliance and stability within financial systems but does not engage in the primary activities of a bank. Thus, the defining characteristic of a bank as a depositor institution is what makes the first choice the correct answer.