The modern economy is designed in such a way that it cannot do without banks. The states fear the collapse of large banks more than their owners, and in case of danger they help such banks to survive by financing them from the budget. Despite the murmur of economists about this, governments are probably right to take this step. A bursting large bank can work like the first domino in a column of its own kind, dumping entire sectors of the economy.
Banks own (if not formally, then indirectly) the largest enterprises, real estate and other property. But this was not always the case. There were times when banks, sometimes honestly, and sometimes not very well, performed their original function - to financially serve the economy and individuals, make money transfers and serve as repositories of values. This is how banks started their activities:
1. Debating about when the first bank appeared, you can break a lot of copies and be left without a consensus. Obviously, cunning individuals should have started lending money “with a profit” almost immediately with the appearance of money or its equivalents. In ancient Greece, financiers have already begun pledge operations, and not only individuals, but also temples were engaged in this. In ancient Egypt, all government payments, both incoming and outgoing, were accumulated in special state banks.
2. Usury has never been accepted by the Roman Catholic Church. Pope Alexander III (this is the unique head of the church, who had as many as 4 antipodes) forbade usurers to receive communion and bury them according to the Christian rite. However, the secular authorities used church prohibitions only when it was beneficial to them.
Pope Alexander III did not like usurers very much
3. With about the same effectiveness as Christianity, they condemn usury in Islam. At the same time, Islamic banks from time immemorial simply take from the client not a percentage of the loaned money, but a share in trade, goods, etc. Judaism does not prohibit usury even formally. A popular activity among Jews allowed them to get rich, and at the same time often led to bloody pogroms, in which the hapless clients of the usurers gladly participated. The highest nobility did not hesitate to participate in pogroms. The kings acted more simply - they either imposed high taxes on Jewish financiers, or simply offered to buy off a significant amount.
4. Perhaps it would be appropriate to call the first bank the Order of the Knights Templar. This organization has made colossal money solely on financial transactions. The values accepted by the Templars “for storage” (as they wrote in the treaties to circumvent the ban on usury) included royal and peerage crowns, seals and other attributes of states. Scattered throughout Europe, the priories of the Templars were analogous to the current branches of banks, making non-cash payments. Here is an illustration of the scale of the Knights Templar: their income in the 13th century exceeded 50 million francs a year. And the Templars bought the whole island of Cyprus with all its contents from the Byzantines for 100 thousand francs. It is not surprising that the French king Philip the Handsome gladly accused the Templars of all possible sins, dissolved the order, executed the leaders and confiscated the property of the order. For the first time in history, the state authorities pointed out the bankers in their place ...
The Templars finished badly
5. In the Middle Ages, the loan interest was at least a third of the amount taken, and often reached two-thirds per year. At the same time, the rate on deposits very rarely exceeded 8%. Such scissors did not greatly contribute to the popular love for medieval bankers.
6. Medieval merchants willingly used bills of exchange from colleagues and trading houses, so as not to carry large amounts of cash with them. In addition, it allowed to save money on the exchange of coins, of which there were a great many at that time. These bills were prototypes of bank checks, paper money, and bank cards at the same time.
In a medieval bank
7. In the 14th century, the Florentine banking houses of Bardi and Peruzzi financed both sides at once in the Anglo-French Hundred Years War. Moreover, in England, in general, all state funds were in their hands - even the queen received pocket money in the offices of Italian bankers. Neither King Edward III nor King Charles VII paid back their debts. Peruzzi paid 37% of the liabilities in bankruptcy, Bardi 45%, but even this did not save Italy and the whole of Europe from a severe crisis, the tentacles of banking houses penetrated so deeply into the economy.
8. The Riksbank, the Swedish central bank, is the world's oldest state-owned central bank. In addition to its foundation in 1668, the Riksbank is also famous for the fact that it debuted on the world financial market with a unique financial service - a deposit at a negative interest rate. That is, the Riksbank charges a small (for now?) Part of the client's funds for keeping the client's funds.
Riksbank modern building
9. In the Russian Empire, the State Bank was formally established by Peter III in 1762. However, the emperor was soon overthrown, and the bank was forgotten. Only in 1860, a full-fledged State Bank with a capital of 15 million rubles appeared in Russia.
The building of the State Bank of the Russian Empire in St. Petersburg
10. There is no national or state bank in the United States. Part of the role of the regulator is performed by the Federal Reserve System - a conglomerate of 12 large, more than 3,000 small banks, the Board of Governors and a number of other structures. In theory, the Fed is controlled by the lower house of the US Senate, but the powers of congressmen are limited to 4 years, while members of the Fed Council are appointed for much longer terms.
11. In 1933, after the Great Depression, American banks were forbidden to independently engage in transactions for the purchase and sale of securities, investing and other types of non-banking activities. This ban was still bypassed, but formally they still sought to comply with the law. In 1999, restrictions on the activities of American banks were lifted. They began to actively invest and lend to real estate, and already in 2008 a powerful financial and economic crisis followed, affecting the whole world. So banks are not only loans and deposits, but also crashes and crises.
