This article is about financial organization that provides money upon conditions.
For other uses, see Bank (disambiguation).
"Banks" and "Banker" redirect here. For other uses, see Banks (disambiguation) and
Banker (disambiguation).
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Banking
The Bank of England, established in 1694
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Coin issued during the reign of the Roman emperor Maximian
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A bank is a financial institution that accepts deposits from the public and creates
a demand deposit while simultaneously making loans.[1] Lending activities can be
directly performed by the bank or indirectly through capital markets.[2]
As banks play an important role in financial stability and the economy of a
country, most jurisdictions exercise a high degree of regulation over banks. Most
countries have institutionalized a system known as fractional-reserve banking,
under which banks hold liquid assets equal to only a portion of their current
liabilities.[3] In addition to other regulations intended to ensure liquidity,
banks are generally subject to minimum capital requirements based on an
international set of capital standards, the Basel Accords.[4]
Banking in its modern sense evolved in the fourteenth century in the prosperous
cities of Renaissance Italy but, in many ways, functioned as a continuation of
ideas and concepts of credit and lending that had their roots in the ancient world.
In the history of banking, a number of banking dynasties – notably, the Medicis,
the Pazzi, the Fuggers, the Welsers, the Berenbergs, and the Rothschilds – have
played a central role over many centuries. The oldest existing retail bank is Banca
Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant
bank is Berenberg Bank (founded in 1590).
