History of Banks and Banking

The Birth of Banking The idea of banks began as long ago as 1800 B.C. Wealth at this time was comprised of GOLD……..Problems In Egypt and Mesopotamia gold is deposited in temples for safe keeping. There are records from Babylon from the time of Hammurabi that indicate loans made by priests from temples. Around 400 B.C. in Greek and Roman cultures banking expands Privite Entrepreneurs, temples, and other public bodies now undertake financial transactions. (Make loans, take deposits, change money, and test coins for weight and purity.) With the collapse of the Roman Empire trade slumped and banks vanished until the 12 th and 13 th century in the Italian towns of Florence, Venice and Genoa

Banks in England: Birth of Modern Banking Started in the 17 th century with the depositing of money with Goldsmiths for safe keeping Due to the cost of war with France the Bank of England was established in 1964 to provide a loan to the Government. Other Countries followed suit with the Bank of Scotland being established in 1695 Banks started issueing their own notes and in 1833 banknotes issued by the BOE were made legal tender In 1844 the Bank Charter Act split the Bank of England into two parts: banking and issuing Bank of England could only issue notes back by gold or government securities

Modern Banks With the Bank Charter Act of 1844, the law did not allow new banks from issuing bank notes. When small banks merged, they lost the right to issue notes (Movement toward one currency)

Banking in America History of Banking Central Banking in the US