The history of banking began with the first prototype banks, that is, the merchants of the world, who gave grain loans to farmers and traders who carried goods between cities. This was around 2000 BCE in Assyria, India and Sumer. Later, in ancient Greece and during the Roman Empire, lenders based in temples gave loans, while accepting deposits and performing the change of money. Archaeological findings from this period in ancient China and India also include evidence of money lending.
Many scholars trace the historical roots of the modern banking system to medieval and Renaissance Italy, particularly the affluent cities of Florence, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many other parts of Europe. The most famous Italian bank was the Medici Bank, established by Giovanni Medici in 1397. The oldest bank still in existence is Banca Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472. Until the end of 2002, the oldest bank still in operation was the Banco di Napoli headquartered in Naples, Italy, which had been operating since 1463.
Development of banking spread from northern Italy throughout the Holy Roman Empire, and in the 15th and 16th century to northern Europe. This was followed by a number of important innovations that took place in Amsterdam during the Dutch Republic in the 17th century, and in London since the 18th century. During the 20th century, developments in telecommunications and computing caused major changes to banks' operations and let banks dramatically increase in size and geographic spread. The 2008 financial crisis led to many bank failures, including some of the world's largest banks, and provoked much debate about bank regulation.
Ancient authority
The shift from a reliance on hunting and gathering of foods to agricultural practices, starting sometime after 12,000 BCE, resulted in increased stability of economic relations. Such changes in socio-economic conditions began approximately 10,000 years ago in the Fertile Crescent, about 9,500 years ago in northern China, about 5,500 years ago in Mexico, and approximately 4,500 years ago in the eastern parts of the United States.
Monetary
Ancient types of money known as grain-money and food cattle-money were used from around 9000 BCE as two of the earliest commodities used for purposes of bartering.
Anatolian obsidian as a raw material for Stone Age tools was being distributed from as early as about 12,500 BCE, and organized trading of it was occurring during the 9th millennium BCE. Sardinia was one of the four main sites for sourcing the material deposits of obsidian within the Mediterranean; trade using obsidian was replaced during the 3rd millennium BCE by trade of copper and silver.
Record-keeping
Objects used for record keeping, "bulla" and tokens, have been recovered from within Near East excavations, dated to a period beginning 8000 BCE and ending 1500 BCE, as records of the counting of agricultural produce. Commencing in the late fourth millennia mnemonic symbols were in use by members of temples and palaces to record stocks of produce. Types of records accounting for trade exchanges of payments were first being made about 3200 BCE. The Code of Hammurabi, written on a clay tablet around 1700 BCE, describes the regulation of banking activity within the civilization (Armstrong); although still rudimentary, banking was well enough developed to justify laws governing banking operations.The word "bank" reflects the origins of banking in temples. According to the famous passage from the New Testament, when Christ drove the money changers out of the temple in Jerusalem, he overturned their tables. Matthew 21.12. In Greece, bankers were known as trapezitai, a name derived from the tables where they sat. Similarly, the English word bank comes from the Italian banca, for bench or counter. Later during the Achaemenid Empire (after 646 BCE), further evidence is found of banking practices in the Mesopotamia region. (p. 76 – "record-keeping & bulla"
Structural
By the 5th millennium BCE, the settlements of Sumer, such as Eridu, were formed around a central temple. In the fifth millennium, people began to build and live in the civilization of cities, providing a structure for the construction of institutions and establishments. Tell Brak and Uruk were two early urban settlements.
Earliest forms of banking
Asia
Mesopotamia and Persia
Banking as an archaic activity (or quasi-bankingM. Chahin – The Kingdom of Armenia: A History Routledge, 2001 ME Stevens Temples, Tithes, and Taxes: The Temple and the Economic Life of Ancient Israel Baker Academic, 2006 ) is thought to have begun as early as the latter part of the 4th millennium BCE,N Luhmann – Risk: A Sociological Theory Transaction Publishers, 2005 (p. 181) to the 3rd millennia BCE.naissance de la banque universalis.fr Accessed 15 September 2018
Prior to the reign of Sargon I of Akkad (2335–2280 BCEChahin, M. – Before the Greeks James Clarke & Co., 1996 Retrieved 8 June 2012) the occurrence of trade was limited to the internal boundaries of each city-state of Babylon and the temple located at the centre of economic activity therein; trade at the time for citizens external to the city was forbidden.Beaudreau, B C – World Trade iUniverse, 13 September 2004 Retrieved 8 June 2012secondary references – + + +
In Babylonia of 2000 BCE, people depositing gold were required to pay amounts as much as one sixtieth of the total deposited. Both the palaces and temple are known to have provided lending and issuing from the wealth they held—the palaces to a lesser extent. Such loans typically involved issuing seed-grain, with re-payment from the harvest. These basic social agreements were documented in clay tablets, with an agreement on interest accrual. The habit of depositing and storing of wealth in temples continued at least until 209 BCE, as evidenced by Antiochus III having ransacked or pillaged the temple of Aine in Ecbatana (Media) of gold and silver.GW Bromiley – International Standard Bible Encyclopedia: A-D Wm. B. Eerdmans Publishing, 13 February 1995 Retrieved 14 July 2012 G G Aperghis – The Seleukid Royal Economy: The Finances And Financial Administration Of The Seleukid Empire Cambridge University Press, 23 December 2004 Retrieved 10 June 2012A Holm -translated by F. Clarke- The History of Greece from Its Commencement to the Close of the Independence of the Greek Nation, Vol. 4 of 4 Macmillan & Co 1898 – Retrieved 10 June 2012C Anthon – A Classical Dictionary: Containing an Account of the Principal Proper Names Mentioned in Ancient Authors and Intended to Elucidate All the Important Points Connected with Geography, History, Biography, Mythology, and Fine Arts of the Greeks and Romans; Together with an Account of Coins, Weights, and Measures, with Tabular Values of the Same Harper & Brothers, 1855 – Retrieved 10 June 2012W Smith – Dictionary of Greek and Roman geography, Volume 2 Walton & Maberly, 1857 – Retrieved 10 June 2012Encyclopædia Britannica shows is "... Hamadān, Iran ..." – Retrieved 10 June 2012
More information comes from the code commissioned by Hammurabi, king of Babylon –1750 BCE. Law 100 stipulated that repayment of a loan by a debtor to a creditor was to be on a schedule with a maturity date specified in written contractual terms. Law 122 stipulated that a depositor of gold, silver, or other property must present all articles and a signed contract of bailment to a notary before depositing the articles with a banker, and Law 123 stipulated that a banker was discharged of any liability from a contract of bailment if the notary denied the existence of the contract. Law 124 stipulated that a depositor with a notarized contract of bailment was entitled to redeem the entirety of their deposit, and Law 125 stipulated that a banker was liable for replacement of deposits stolen while in their possession.
Cuneiform records of the house of Egibi of Babylonia describe the family's financial activities as having occurred sometime after 1000 BCE and ending sometime during the reign of Darius I. These records suggest a "lending house" (Silver 2002), a family engaging in "professional banking..." (Dandamaev et al. 2004), and economic activities similar to modern deposit banking. Another interpretation is that the family's activities are better described as entrepreneurship rather than banking (Wunsch 2007). The Murashu family apparently took part in providing credit (Moshenskyi 2008).R Rollinger, C Ulf, K Schnegg – Commerce and Monetary Systems in the Ancient World: Means of Transmission and Cultural Interaction : Proceedings of the Fifth Annual Symposium of the Assyrian and Babylonian Intellectual Heritage Project, Held in Innsbruck, Austria, 3–8 October 2002 M Silver – Modern Ancients Franz Steiner Verlag, 2004 Retrieved 10 July 2012 Gwendolyn Leick (ed.) – The Babylonian world C Wunsch – The Egibi Family Routledge 2007 Retrieved 10 July 2012 OJ Thatcher – The Library of Original Sources: Volume I (The Ancient World) The Minerva Group, Inc., 30 June 2004 translated by – TG Pinches Retrieved 10 July 2012RN Frye – Handbuch der Altertumswissenschaft, Part 3, Volume 7 C.H.Beck, 1984 Retrieved 10 July 2012 S Moshenskyi – History of the Weksel Sergei Moshenskyi, 1 August 2008 Retrieved 10 July 2012
Asia Minor
From the fourth millennium previously agricultural settlements began administrative activities.S R Steadman, G McMahon – The Oxford Handbook of Ancient Anatolia: (10,000–323 Bce) Oxford University Press, 5 September 2011 Retrieved 25 June 2012A. G. Sagona, Claudia Sagona – Archaeology at the North-east Anatolian Frontier, I.: An Historical Geography and a Field Survey of the Bayburt Province Peeters Publishers, 2004 Retrieved 25 June 2012secondary – Luc-Normand Tellier Urban World History: An Economic and Geographical Perspective PUQ, 2009 ISBN 2760515885 Retrieved 25 June 2012Catholic Encyclopedia New Advent Retrieved 25 June 2012
The temple of Artemis at Ephesus was the largest depository of Asia. A pot hoard dated to 600 BCE was found in excavations by The British Museum during 1904. During the time of the cessation of the first Mithridatic war, the entire debt being held at the time was annulled by the council. Mark Antony is recorded to have stolen from the deposits on occasion. The temple served as a depository for Aristotle, Caesar, Dio Chrysostomus, Plautus, Plutarch, Strabo and Xenophon.secondary – The British Museum Retrieved 3 June 2012secondary – Dio Chrysostom Orations: 7, 12 and 36 (Edited by: D. A. Russell, St John's College, Oxford) Cambridge University Press 2012. Retrieved 3 June 2012The British Museum Retrieved 3 June 2012secondary – N Hooke – The Roman History, from the Building of Rome to the Ruin of the Commonwealth, Volume 3 G. Hawkins, W. Strahan, 1770. Retrieved 3 June 2012(p. 126) K Roberts →
The temple to Apollo in Didyma was constructed sometime in the 6th century. A large sum of gold was deposited within the treasury at the time by king Croesus.The British Museum Retrieved 16 June 2012
India
In ancient India there are evidences of loans from the Vedic period (beginning 1750 BCE). Later during the Maurya dynasty (321–185 BCE), an instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, which corresponds to the definition of a bill of exchange as we understand it today. During the Buddhist period, there was considerable use of these instruments. Merchants in large towns gave letters of credit to one another.C Gomez – Financial Markets Institutions And Financial Services Prentice-Hall 2008 Retrieved 11 July 2012 A Chavez Irapta, Et Al – Introduction to Asia: History, Culture, and Civilization Rex Bookstore, Inc., 2005 Retrieved 11 July 2012
China