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Banking is a pillar of modern civilization, but its origins date back over four millennia and possibly even further.

From simple deposits and concepts of interest, to the creditor-debtor relationship, letters of credit, institutional independence and the ongoing conversation about regulation, we follow some key developments in the history of the bank.

c.2000 BC

Babylonia opens the way for interest

Although the concept of depositing wealth is probably even older, the palaces and temples of the Mesopotamian state of Babylonia are among the first to register a key innovation: interest.

Those who wished to store their gold had to pay 1.6% interest on its value to the institution.

c.49 BC

Julius Caesar changes the creditor-debtor relationship

The Romans took the bank out of the temples and made it a separate area. During Julius Caesar’s five-year reign as dictator, he granted creditors the power to confiscate land from debtors who could not pay with money.

This new dynamic has consolidated the power of banking institutions for generations.

c.14th century

Italian banks set a new standard

Banking in the Renaissance era reached a new level of sophistication.

The Venice and Florence hubs developed innovative credit products that allowed traders to travel long distances without fear of financial ruin from their stolen cash reserves. These were analogous to modern checks. Later, Florentine banks also created treasury bills.

18th and 19th centuries

The modern banking model emerges

Adam Smith conceptualized a banking model that was independent from state oversight and self-regulated. Alexander Hamilton then developed this idea in the creation of a national bank and uniform currency in the United States.

This created stability for a sector which had become notoriously parochial and ephemeral; local banks generally have not survived for more than five years.

20th and 21st centuries

Retail banking struggling with regulation

Currently, retail banks offered their customers three main products: credit, deposits and wealth management.

The lack of banking regulations precipitated both the Great Depression of 1929 and the financial crisis of 2008. The conversation about what banks can and cannot do with depositors’ funds continues to this day.



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