Explain the Origin of Banking

The definition of 'bank' is not an easy task. The search for a definition of a 'bank' in statute and case law, illustrates this difficulty. Much of the difficulty has arisen from the circularity of the traditional definition – that a bank is a person or body authorized to carry on or recognized as carrying on the business of banking. What constitutes the business of banking is a complex question. The modern term 'bank' comes from the 'banco' or merchant's bench in the marketplaces of medieval Italy: money dealing was conducted from a portable bench, which would be publicly broken in the event of failure of the merchant?s business – the origins of the concept of bankruptcy.
But banking as an activity is much older. In ancient times the temple was likely to be the location of much of what is recognized as banking business. In Mesopotamia, money could be borrowed at interest from the temple; in Greece, sanctuaries and temples were often the store house or place of safe custody for bullion and valuables; and in Jerusalem money-changers located in the temple would exchange currency and allow interest on deposits with them. The code of laws devised by Hammurabi, King of Babylon, between 2081BC - 2084 BC included references to charging interest on loans and a right of privacy in lending transactions.
These early examples include some of the ingredients of what have come to be regarded as the key characteristics of banking: taking money on deposit and lending. And the location within temples would have provided another important ingredient - an air of security. Recognizable „bankers? appeared again in the middle ages, financing trade and wars. It was not until comparatively modern times that the deposit of funds by the wider community with a banker who was then expected to use the funds at his or her discretion that led commercial lending.

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Wilfykil answered the question on March 8, 2019 at 07:30