Banks are such a familiar part of everyday life that it’s easy to take them for granted. However, the concept of banking is layered with a fascinating history filled with unexpected twists and turns. Let’s take a look.
The First Banks
The very first “banks” didn’t start in grand buildings with vaults and security, they began in ancient temples. In Mesopotamia, around 2000 BC, temples served as the safekeeping facilities for grain and other commodities.
The Pioneers of Modern Banking
The Knights Templar, a religious military order founded in 1119, are most famous for their role in the Crusades. But they also played a crucial part in the development of early banking systems. The Templars instituted a form of banking that would allow European pilgrims to deposit funds at one point and withdraw them in the Holy Land. This system protected pilgrims from carrying cash that could be stolen during their long journey.
Bank Was Founded By a Pope’s Nephew
In 1472, after a massive failure of several deposit banks in Italy due to insolvency, Giovanni di Bicci de’ Medici, who was the nephew of Pope John XXIII, established the Medici Bank. This bank introduced several innovations that are still fundamental to banking today, such as double-entry bookkeeping and branches with semi-autonomous managers.