In the 18th century BC, many people who had accumulated wealth in the form of gold realized that it came with its own disadvantages. Such as unless the gold was protected or hidden, it could easily be stolen. In the majority of early civilizations, temples were considered to be the safest place to keep personal belongings. It was a solid structure that was considered sacred and had a constant influx of people. In Mesopotamia and Egypt, the gold was deposited in temples to keep it safe. However, it would just lay idle while those in the trading community and government had a desperate need for it. At the time of Hammurabi in Babylon during the 18th century BC, records have been found to show that the priests of the temple were making loans to individuals. It is believed that it was at this point that banking was born, and the rest is history.
In ancient Greece, temples, private entrepreneurs, and public bodies were undertaking transactions of a financial nature. They were known to change conferences from one to another, take deposits, test coins for their purity and weight and make loans. They have even been shown to perform book transactions. Lenders could be found who would take a payment or deposit from an individual in one city and then arrange for the credit to be transferred to another city. This helped create an air of security for those individuals who had previously needed to transport large sums of money or gold themselves.
After this Rome took banking to the next level by regulating and adopting the Greek banking practices. By the time the second-century AD had come around, a debt could be officially discharged by paying in an appropriate amount into the bank. Public notaries were involved to register and make notes of these types of transactions. By the time the late 16th century arrived, the Banco de La Piazza di Rialto began to trade in Venice. It was at this time that a cheque arrived and in its most basic form allowed for goods and transactions to be performed as long as the individual had funds in their Bank. In 1661, Sweden became the first country to issue paper banknotes, shortly followed by the Rothschild dynasty, which introduced the formation of banks as we know them today. The history of banking is a long and rich one that begins with grain, through to gold…. with a nod to property finance!