Topic history of banking industry in

The principal services offered relate to storing, transferring, extending credit against, or managing the risks associated with holding various forms of wealth. The precise bundle of financial services offered at any given time has varied considerably across institutions, across time, and across jurisdictions, evolving in step with changes in the regulation of the industry, the development of the economy, and advances in information and communications technologies. Often, banks usefully alter the terms of the contractual arrangement as the funds move through the transfer process in a manner that supports and promotes economic activity. By issuing tradable claims bank deposits against itself, the bank can add a flexibility to the circulating media of exchange in a manner that enhances the performance of the payments system.

Topic history of banking industry in

Most of us need a mortgageor some form of creditto make such a large purchase. In fact, many people use credit in the form of credit cards to pay for everyday items.

Currency, particularly the use of coins, grew out of taxation. In the early days of ancient empires, a tax of one healthy pig per year might be reasonable, but as empires expanded, this type of payment became less desirable.

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Additionally, empires began to need a way to pay for foreign goods and services, with something that could be exchanged more easily. Coins of varying sizes and metals served in the place of fragile, impermanent paper bills. To read more about the origins of money, see What Is Money?

Flipping a Coin These coins, however, needed to be kept in a safe place. Numerous people, like priests or temple workers whom one hoped were both devout and honest, always occupied the temples, adding a sense of security.

There are records from Greece, Rome, Egypt and Ancient Babylon that suggest temples loaned money out, in addition to keeping it safe.

Coins could be hoarded more easily than other commodities, such as pound pigs, so there emerged a class of wealthy merchants that took to lending these coins, with interestto people in need.

Temples generally handled large loans, as well as loans to various sovereigns, and these new money lenders took up the rest. The First Bank The Romans, great builders and administrators in their own right, took banking out of the temples and formalized it within distinct buildings. Julius Caesar, in one of the edicts changing Roman law after his takeover, gives the first example of allowing bankers to confiscate land in lieu of loan payments.

Small-time moneylenders that competed with the church were often denounced for usury.

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Visa Royal Eventually, the various monarchs that reigned over Europe noted the strengths of banking institutions. This easy finance led kings into unnecessary extravagances, costly wars, and an arms race with neighboring kingdoms that would often lead to crushing debt.

The trend of turning a blind eye to the creditworthiness of big customers, continues to haunt banks up into this day and age. Adam Smith and Modern Banking Banking was already well established in the British Empire when Adam Smith came along in with his " invisible hand " theory.

This free market capitalism and competitive banking found fertile ground in the New World, where the United States of America was getting ready to emerge. To learn more, read Economics Basics.

The average life for an American bank was five years, after which most bank notes from the defaulted banks became worthless.

These state-chartered banks could, after all, only issue bank notes against gold and silver coins they had in reserve.

Compounding these risks was the cyclical cash crunch in America. Alexander Hamilton, the secretary of the Treasuryestablished a national bank that would accept member bank notes at parthus floating banks through difficult times.

This national bank, after a few stops, starts, cancellations and resurrections, created a uniform national currency and set up a system by which national banks backed their notes by purchasing Treasury securitiesthus creating a liquid market.

Through the imposition of taxes on the relatively lawless state banksthe national banks pushed out the competition.

The damage had been done already, however, as average Americans had already grown to distrust banks and bankers in general. Merchant Banks Most of the economic duties that would have been handled by the national banking system, in addition to regular banking business like loans and corporate financefell into the hands of large merchant banksbecause the national banking system was so sporadic.

During this period of unrest that lasted until the s, these merchant banks parlayed their international connections into both political and financial power. Originally, they relied heavily on commissions from foreign bond sales from Europe, with a small backflow of American bonds trading in Europe.

This allowed them to build up their capital.

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At that time, a bank was under no legal obligation to disclose its capital reserve amount, an indication of its ability to survive large, above-average loan losses.

While upstart banks came and went, these family-held merchant banks had long histories of successful transactions. As large industry emerged and created the need for corporate finance, the amounts of capital required could not be provided by any one bank, and so initial public offerings IPOs and bond offerings to the public became the only way to raise the needed capital.

Topic history of banking industry in

The public in the U. By the late s, many banks demanded a position on the boards of the companies seeking capital, and if the management proved lacking, they ran the companies themselves. Morgan and Monopoly J. Morgan and Company emerged at the head of the merchant banks during the late s.

It was connected directly to London, then the financial center of the world, and had considerable political clout in the United States. To find out more about this subject, read Antitrust Defined.Aug 22,  · The banking industry is currently experiencing new but tough competition.

Challenger banks, Fintech start-ups, and technology firms are currently seen as a . Mar 19,  · Research topics in banking industry Research topics in banking industry.

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The banking sector has embraced the use of technology to serve its client’s faster and also to do more with less. Emerging technologies have changed the banking industry from paper and branch based banks to ”digitized and networked banking services.

Unlike before, broadband internet is cheap and it makes the transfer of data easy and [ ]. Banking in India, in the modern sense, originated in the last decade of the 18th century. Among the first banks were the Bank of Hindustan, which was established in and liquidated in –32; and the General Bank of India, established in but failed in Although no adequate documentation exists prior to the thirteenth century, banking is known to have a longer history.

However, many of the early “banks” dealt primarily in coin and bullion, much of their business being concerned with money-changing and the supply of lawful foreign and domestic coin of the correct weight and fineness.

History of banking - Wikipedia