How Banks Came To Be
Banks have changed greatly since early times. The word bank comes from banco, which is the Italian word for bench. This bench was a table upon which money was counted and changed in the Middle Ages, about seven hundred years ago. But banking is much older than this. Long ago, there were many different kinds of coins used in ancient markets. There had to be a money changer around to exchange small coins for large ones, and to give familiar coins for foreign ones.
Some coins contained more gold or silver than others, and the money changers of old had to know the value of all coins. These money changers were an important part of the life of the ancient world. They are mentioned several times in the Bible. As Europe grew in trade and in wealth, there was a need for people who would do more than change money, and so banking came into being. In order to be a banker, a person had to have money. He had to be respected, so that others would leave their money with him. He also had to have business connections in different cities and countries. Checks could be sent to faraway places, instead of carting heavy gold through dangerous places. Great merchants in Italy started to take deposits and lend money.
There was a religious law forbidding interest on loans, but the law was changed. Bankers were able to gain great wealth. In the city of Florence, in Italy, a wealthy merchant- banker named Cosimo de' Medici became so powerful that he became the ruler of the city and some of his descendants were kings and queens.
by: David Bunch
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