The History of Banking

By around 2000 BCE, temples and merchants in Assyria, Sumer, and India extended grain and silver loans to farmers and traders. The Code of Hammurabi (c. 1754 BCE) formalized interest rates and debt obligations, producing the earliest known regulation of lending.

Location: Mesopotamia

In ancient Greece and Rome, temples and private trapezitai and argentarii accepted deposits, made loans, and changed money across currencies. These institutions provided the core functions of banking centuries before the word existed.

Location: Athens and Rome

Giovanni di Bicci de' Medici founded the Medici Bank in Florence, which grew into a pan-European network of branches pioneering bills of exchange, international credit, and double-entry bookkeeping practices. The Bardi and Peruzzi families had built similar networks a century earlier, and the Siena bank Monte dei Paschi, founded in 1472, survives to this day as the world's oldest bank.

Location: Florence, Italy

The Dutch Republic founded the Bank of Amsterdam, a public exchange bank offering a stable unit of account amid the chaotic coinage of the era. Combined with Stockholms Banco's issuance of the first European banknotes in 1661, the Dutch and Swedish innovations established the machinery of modern commercial banking.

Location: Amsterdam, Netherlands

The Bank of England was chartered to raise funds for the Crown in its war with France, becoming the model for central banking: a lender to government, manager of the note issue, and ultimately overseer of the banking system. Goldsmith bankers in London had already developed deposit banking and banknotes; the Bank institutionalized it.

Location: London, England

The Rothschild family built a cross-border banking network across London, Paris, Vienna, and Frankfurt that financed states and wars in the Napoleonic era, moving funds and intelligence faster than governments could. The house became a byword for international finance and the power of private bankers in the 19th century.

Location: London and Frankfurt

More than 9,000 US banks failed between 1930 and 1933 as panics cascaded through the Depression. The Banking Act of 1933 (Glass-Steagall) separated commercial from investment banking, created federal deposit insurance (FDIC), and inaugurated an era of strict financial regulation.

Location: United States

Delegates from 44 nations meeting at Bretton Woods created the International Monetary Fund and the World Bank, anchoring a system of fixed exchange rates tied to the US dollar. The architecture underwrote postwar reconstruction, cross-border banking growth, and the globalization of finance.

Location: Bretton Woods, New Hampshire, United States

The Basel Committee of bank supervisors from major economies agreed the first international capital standard (Basel I) in 1988, requiring banks to hold minimum capital against risk. Successive accords extended the framework as banking globalized, an ongoing attempt to keep national regulation ahead of international balance sheets.

Location: Basel, Switzerland

The collapse of Lehman Brothers, the largest bankruptcy in US history, triggered a global panic that felled or forced the rescue of major banks on both sides of the Atlantic. The crisis led to bank restructurings, central bank interventions on an unprecedented scale, and new regulatory regimes such as the 2010 Dodd-Frank Act, reviving the long-running debate over how tightly to govern banking.

Location: New York, United States