In ancient Mesopotamia, banking was a vital part of the economy. People used clay tablets to record transactions, and temples served as banks where merchants could store and borrow goods.
The Code of Hammurabi, created around 1754 BCE, shows that temples were responsible for storing and lending grain, oil, and other goods. This system was the precursor to modern banking.
In ancient Greece, the temple of Apollo at Delphi was a major financial hub. People would deposit their valuables and receive a receipt, known as a "stratikon", to prove ownership.
These early banking systems laid the foundation for modern banking practices, where institutions hold and manage money on behalf of their customers.
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Ancient Banking Systems
In Ancient Greece, the trapezitai filled the role of bankers, providing services like money-changing, interest-payments, and pawnbrokering. They operated in the marketplace or at festival sites, changing foreign merchants' coinage into local currency.
The trapezitai were initially reliant on transactions generated by money-changing activity, but they also accepted deposits and made payments from individuals. Many early bankers in Greek city-states belonged to the metic status, which was often associated with foreigners living as outsiders within society.
The task of keeping deposited wealth was often allotted to the neokoros or zakoros, or at Kos to the hierophylakes, who were also record-keepers of such exchanges. In Athens, a banker's wife would often wed his slave after his death, as the slave had inherited his previous owner's bank.
The Ptolemaic dynasty in Egypt borrowed from the Athenian banking system, but added new details. They formed a banking system that included both state and private banks, with at least one bank in the capital of every nome (province).
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Mesopotamia
In Mesopotamia, certain families were known as merchant bankers, but their economic activities didn't exactly fit the definition of banking proper. They charged the same interest on deposits as they did for loans, and didn't participate in arbitrage.
The House of Egibi, House of Murashu, and Ea-iluta-bani family were all classified as merchant bankers by Nemet-Nejat. These families were active in the region during the Neo-Babylonian and Persian periods.
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The unification of city-states in Assyria and Sumer by Sargon of Akkad led to the creation of common standards for measurement, including shekels. Naram-Sin of Akkad promulgated these standards, which were used by artisans in each city.
A 2.25 meter tall basalt stele was found in Shush, Iran, inscribed with 4,130 lines of cuneiform law dictated by Hammurabi. This law code included regulations on lending and banking practices.
Law 100 of the Code of Hammurabi stipulated repayment of a loan by a debtor to a creditor on a schedule with a maturity date specified in written contractual terms.
Ancient Greece
In Ancient Greece, the role of bankers was filled by trapezites, who provided a variety of services including money-changing, providing interest-payments on deposited monies, pawnbrokering, acting as notaries, and the safe-guarding of valuables.
Trapezitai were initially active during the 5th century BCE and were greatly reliant on transactions generated by money-changing activity. They also accepted deposits and made and took payments from individuals.
Many early bankers in Greek city-states belonged to the metic status, which was a status for foreigners living as outsiders within society. This status was often associated with money-lending and commercial activities.
The task of keeping deposited wealth was often allotted to the neokoros or zakoros, or in some cases, to the hierophylakes who were also record-keepers of such exchanges.
To ensure the security of assets, a banker in Athens, Aigina, and elsewhere would often have his wife wed his slave after his death, as the slave had inherited his previous owner's bank upon his death.
Roman Banking
Roman Banking was a complex system that involved various groups of money handlers and bankers.
The argentarii were private money changers in ancient Rome who provided loans, held money, circulated money, and exchanged currency. They were located at stalls, shops, and in the forum and were supervised by the government.
Their primary goal was to exchange foreign currency for Roman currency, and their clients were typically not wealthy individuals. The argentarii were likely founded around the 4th century BC and expanded their powers to include almost all forms of financial transactions.
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The mensarii, or public bankers, were introduced in 352 BC to address citizen indebtedness during times of poverty and war. They provided funds from public resources to citizens who could offer sufficient security.
The mensarii were highly respected for their role in alleviating excessive debt and resolving citizens' financial difficulties. They were state-appointed public bankers who managed the circulation of currency and provided loans to the population.
The nummularii managed a bank responsible for circulating new coins and ensuring their quality. They exchanged old or foreign coins for new ones and verified the authenticity and value of coins.
The nummularii also held deposits, lent money, facilitated auctions, and executed payments abroad through local bankers. They were a group designed to mint and test new currency, examining the metal used to make coins and verifying their patterns.
By the 3rd century, the nummularii were the last banking profession in ancient Rome, handling all banking affairs. They ran a bank, put new currency into circulation, and removed foreign or old coins from circulation.
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History
In ancient Rome, the earliest banks were located in temples, where officials and employees were trusted to protect and hold the wealth of the upper class.
These temples would store money in multiple locations to prevent loss in case one temple was destroyed or attacked.
The trapezites were another group of bankers in ancient Rome, providing services in counting houses near the Forum.
They were predecessors of the argentarii, who would later acquire different roles in the banking profession.
The argentarii and numularii reappeared in ancient sources in the mid-fourth century AD, after disappearing from the historical record between 260 AD and the fourth century.
The state-appointed public bankers, known as mensarii, were established in 352 BCE to combat high levels of debt and social unrest.
They provided the population with access to public services and loans, as well as managed the circulation of currency.
The mensarii evolved into the triumviri mensarii in 216 BCE, a commission of three people that performed the same duties as the previous organization.
These groups could perform similar functions to the argentarii, such as money holding and assaying currency.
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Banking Practices
The Ptolemies introduced coinage to Egypt, which was based on the drachma used throughout the Greek world.
The Ptolemaic drachma weighed less than other drachmas and those used within Egypt were made of bronze.
Ptolemy II's rule saw a significant increase in the amount of bronze coins circulating, partly due to the requirement to pay taxes with coins.
The high, fixed interest rate of 24% awarded by both royal and private banks prevented the development of a credit and debt economy.
Royal banks collected coin taxes, while both royal and private banks awarded credit and loans to private individuals.
At least one bank was located in the capital of every nome (province), and banks were licensed and franchised by the crown.
The banking system in Egypt borrowed from the Athenian system but added some new details, with Ptolemy II overseeing its formation.
The widespread use of hard currency made a banking system necessary for the collection of taxes and the loaning of credit.
Frequently Asked Questions
Who were the original bankers?
The original bankers were the priests who managed the temples in ancient Mesopotamia, where they lent valuable resources to local farmers and merchants. These early banking pioneers played a crucial role in the development of modern banking systems.
Who were the bankers in ancient Greece?
Ancient Greek bankers were known as trapezitai, a term derived from the Greek word for "table", which they used as a reference to their business. They were active in ancient Greece as early as the 5th century BCE.
What were bankers called in medieval times?
In medieval times, bankers were referred to as pawnbrokers, moneychangers, and merchant bankers. These early banking roles laid the groundwork for the modern banking industry.
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