National Australia bank
What is the bank?
A bank is a financial institution that accepts deposits from the public and places demand deposits when making loans. Loans can be made directly by banks or indirectly through the capital market.
Because banks play an important role in a country's financial stability and economy, most jurisdictions impose a high level of regulation on banks.
Most countries have institutionalized a system called fractional-reserve banking, in which banks hold only a fraction of their current assets in current assets. In addition to other regulations to ensure liquidity, banks are generally subject to minimum capital requirements based on the Basel Accord, an international capital standard.
Banking in the modern sense developed in the bustling cities of the Italian Renaissance in the 14th century, but in many ways served as a continuation of the ideas and concepts of credit and lending that originated in ancient times.
In the history of banking, many banking dynasties—especially the Medici, Fugger, Welser, Berenberg, and Rothschilds—have played a role over many centuries core role.
The oldest surviving retail bank is Banca Monte Dei Paschi di Siena, while the oldest surviving commercial bank is Berenberg.
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The concept of banks may have originated in ancient Assyrian and Babylonian times when merchants offered grain loans as collateral in a barter system. Lenders during the ancient Greek and Roman empires added two major innovations: they accepted deposits and exchanged money. Archaeology from this period in Iran, ancient China, and India also show evidence of borrowing.
middle Ages
The current era of banking can be traced back to medieval and early-Renaissance Italy, and to the wealthy central and northern cities of Florence, Lucca, Siena, Venice, and Genoa.
The Bardi and Peruzzi families ruled banking in 14th-century Florence and established branches in many other parts of Europe.
Giovanni di Bicci de Medici founded one of Italy's most famous banks, the Medici Bank, in 1397. The Republic of Genoa established the oldest known national deposit bank, Banco di San Giorgio, in Genoa, Italy, in 1407.
early modern
Fractional-reserve banking and note issuance emerged in the 17th and 18th centuries. Merchants began depositing their gold with goldsmiths in London who had private vaults and charged a fee for their services. In return for each precious metal deposit, goldsmiths issued receipts certifying the quantity and purity of the metal they hold as custodians; these receipts are non-transferable and only the original depositor can claim the stored goods.
Gradually, goldsmiths began to borrow money on behalf of depositors and issued promissory notes for money deposited into goldsmiths. Thus, in the 19th century, we found that "in the ordinary case of a bank company or banker deposit, the transaction is just a loan or mutual money, and the bank does not need to repay the same money, but the corresponding amount when needed.".
"There is something which, when deposited in a bank, ceases to be full capital money; then there is the banker's money, which, if called upon to do so, he is obliged to return by paying an amount similar to the amount he deposited equivalent."
Goldsmiths pay interest on deposits.
This was an early form of fractional reserve banking as promissory notes were paid on demand and advances to Goldsmith's clients were repaid over a longer period. A promissory note has evolved into a negotiable bill as a safe and convenient means of payment
Covered by the goldsmith's promise to pay,
Enables goldsmiths to issue loans with low default risk. Thus, the goldsmiths of London became pioneers in banking, creating new money based on credit.
The Bank of England introduced a permanent paper currency issue in 1695. The Royal Bank of Scotland established the first overdraft facility in 1728. By the early 19th century, Lubbock Bank in London had established a bank clearing house, allowing multiple banks to clear transactions. The Rothschild family pioneered large-scale international finance, funding the British government's purchase of a stake in the Suez Canal in 1875.
etymology
The word bank is from Middle French banque, from Old Italian Banca, meaning "table", and introduced into Middle English from Old High German banc, bank, "bank, counter". During the Renaissance, benches were used as makeshift desks or change counters by Florentine bankers, who handled their transactions at desks covered with green tablecloths.
definition
The definition of a bank varies from country to country. More information can be found on the respective country pages.
In English common law, a banker is defined as a person who conducts banking business by holding checking accounts for clients, paying cheques, and collecting cheques for clients.
Most common law jurisdictions have bills of exchange statutes that codify the laws relating to negotiable instruments (including cheques), and that statute provides a statutory definition of the term banker: Banker includes a body corporate, whether incorporated or not, They run the banking business."
Although this definition appears circular, it is valid because it ensures that the legal basis for banking transactions such as checks does not depend on how the bank is structured or regulated.
In many common law countries, banking is not defined by law, but by common law as defined above. Other English common law jurisdictions have statutory definitions of banking or banking. When considering these definitions, it is important to remember that they define banking in terms of legislation, not in general.
In particular, most definitions come from legislation designed to regulate and supervise banks, not the banking industry itself. In many cases, however, statutory definitions mirror common law definitions. Examples of legal definitions:
"Banking business" means the business of receiving money in a checking or deposit account, paying and receiving checks drawn or deposited by customers, advances to customers, including any other business the Authority may prescribe for this purpose; Section 2, explain).
"Banking business" means one or both of the following:
# Public funds received in a checking account, deposit account, savings account, or similar account, shall be repaid on demand or within a period of less than... or with notice or notice less than that period;
# Pay or collect checks drawn or deposited by customers.
With the advent of EFTPOS, direct credit, direct debit, and online banking, checks have lost their primacy as payment methods in most banking systems.
