Banking is not a new concept. It came along with the first currencies or maybe way before that is still not discovered. Banking is a vast topic. It consists of topics like savings, FD, loan systems, house loans, car loans, etc.
Earlier, the system was quite different than what we have now. They had to deal with annual taxation. But gradually, with the expansion of empires, annual banking came to a halt. Soon, banking institutions were created. This constituted savings, loans, FD, car loans, home loans, etc. to satisfy the market. With the economic expansion, banks allowed the public to access their money with larger purchases.
From the Second World War to the present day, the US has helped to lift its economy in several ways and the new banking system is one of the major reasons. Take a look at the evolution of the banking system given below. If you look at history, the first banking started when there was a need to pay for foreign goods and services by emperors. There were no notes like we have now but they had various coins that were exchanged.
As banks were absent, people kept their savings in temples. This was the first time where a temple was used as a loan. After a few decades, the Romans started with “banks”. The greatest example is Julius Caeser who confiscated lands if loans were unpaid. Slowly, people started giving out their house loans if savings were finished. Even though the Roman Empire ended, the savings, house loans, FD was still carried on.
The first establishment of modern banking was by Adam Smith in 1776. He started capitalism and competitive banking in the US. He also started with new policies for savings, loans, FD, house loans, and other banking materials. In 1800, several loan losses decreased the bank’s reputation.
In 1886, cars were invented. They were one of the most expensive items at that time, hence car loans started. Racism became a lead factor for loans, FD, savings, house loans, and car loans. After 1907, the US ensured no private bank should have more powers. During World War I, America emerged as became a global lender. The government made clear that debtor nations must pay war loans, either by savings or other means. World War II lifted US and world economies slowly. Thus savings, loans, FD, house loans, and car loans soon became stable.
The current banking system is quite different from what that US had back then. Savings, loans, FD, house loans, car loans, etc. played a huge role in clearing debts. Banks were important in people’s lives and will continue to be forever