Banking is one of those things that we have to deal with every day. We have bills to pay, wages to get, and the banks are slap bang in the middle of it all. But like everything else in this world, banking has a history, and I have five facts about the history of banking that you can lodge in your brain bank of intelligence.
Banking is older than you think
Banks might have fancy signs that tell you when they were established, but on the grand scale of things, they aren’t old at all. Some of the first banks were merchants who traded in grain loans to farmers. This dates back to around 2000 BC in parts of the world. When the first coins were minted, people kept them safe in their local temple. But it was the Romans who created some of the first banks by taking the money out of the temples and putting it into their own special buildings.
Loans have a code of conduct
These days, you can’t swing a cat by the tail without hearing some sort of loan scam. But did you know that there is a loan code of conduct that dates back to around 1754 BC? The Code of Hammurabi is one of the oldest known code of law that dictates how the handling of interest of loans should be done. There is also evidence in Greece that loans were given with an interest rate of 12%. Although the laws and interest rates have changed, modern loans from the likes of Cash Lady and the banks have a code of conduct that they have to follow for the modern world.
Interest was against the law
Thanks to the Church and their opinions on everything, banks and parishes were not allowed to charge interest on loans of money. During the Middle Ages, this was considered a sin, as was a lot of things back then. But by the end of the 15th century, the Churches influence on banking had started to fade and banks were able to charge for money exchanges. It was this change in attitude that allowed banking to head towards the modern shape that we know today.
Different faiths had different rules
Although the Christian Church had a certain view about charging interest, the Jewish faith did not have that problem. Jewish traders provided insurance and credit services to farmers. By the 17th century, Jewish financiers were responsible for handling the finances of the wealthy noblemen of Europe. But, despite being wealthy, some of the world’s royalty had problems controlling themselves. In 1557, Phillip II of Spain caused the first national bankruptcy after several pointless wars forced the country into a mountain of national debt.
Modern banking as we know it
The first permanent issue of a banknote was by the Bank of England in 1695. Meanwhile, in America, there was so much distrust towards banks that the state of Texas outlawed bankers until 1904. There was so much trouble with the banking system in the 18th and early 19th century that people grew to distrust banks because they kept getting robbed and lost peoples money. It was this lack of faith that led to the formation of the various government bodies that exist today to protect your money.