History of banking

Banks are today one of the main engine of global economy, yet, banks aren`t around sincer ever. Their history and transformation is slow and complex.

Although it sounds unlikely, the banks are older than money! First banks started up in Mosopotamia, more then 5000 years ago, arround temples and palaces, the most thrusty, powerful and protected institutions of that time.

The banking operations in Mesopotamia (wich are also described in Hammurabi’s code) used instead of money pieces of silver, copper, gold or divers quantity of wheat, herds of sheeps and so on!

The invention of coin in 6th century B.C., boosted the banking operations!

Temples and private institutions of ancient Greece offered diverse financial operations like loans, currency exchange, currency authentification or checks that were recognised between city-states of Ellada.

The romans further developed the bancar system but the collapse of the empire, barbarian inventions and christian and muslim religions brought a sharp decline of banking.

During Dark Age the use of currency was limited, people traded usually in barter system, changing a good against another.

Beginning with X century A.D. european economy become stronger, population grew and the use of money increased again.

Kings, nobility and high clergy needed loans for financing wars or construction of buildings and since mainstream christianity forbaded interaste rate, the banking activity were almost exclusivly in the hands of jews.

This situation changed slowly when, during the Crusades, italian merchants, from Venice and Genoa, started to offer loans to crusaders and to byzantines, ofenly reciving in this way comercial monopols and even teritories in Eastern Mediteranean basin.

During XIV-XVI centuries Italy gave to Europe famous dinasties of bankers like Di Medici, Bardi or Peruzzi.

Almost in the same period, christian bankers started to appear in northen german towns of Hanseatic League.

Although formaly forbitted by the Catholic Church, the banking was tolerated becouse popes and bishops also needed loans for their institutional or personal businesses.

The advet of Reform and the shifting of trade balance from old comercial rutes to the new ones (created by the Geographical Discoveries of new maritime wayes and territories), was another big chapter in the history of banking.

Grow of population created grow of economy, grow of commerce and grow of need for loans and other financial services. The first modern bank was created in 1609 in Amsterdam, Holland becoming in that time the banking capital of Europe.

Since that time, the banking system become a huge, global industry, source of money and political power, with banks that created, destroyed, financed and blackmail countries and nations, but is topic will be discussed in another intresting article.

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