We are talking about Bank and How Bank effect the society, this is all about the Trade relations between society and the country. From the ancient world we (HUMAN) are trading with each other as this Trade Bring the wealth to the People or the Nation.
The Wealth people Gains, people starts to think how these excessive amount should be stored securely and invested for the Growth of Trade or Happiness of The society. This is the basics step to enhance the Growth or Devlopment we get till now.
Devlopment of Trade in the World:
In all cash transactions, very few people buy their homes, with the exception of extremely rich ones. To make such a large purchase, most of us need a mortgage or some form of credit. Many people actually pay for everyday items using credit cards. It wouldn’t work without credit, or without banks to issue credit, in the whole world as we know it. The birth of these two thriving industries is to be explored below.
How Investment aroses Around The World:
Since the first currencies were melted, banks have been around, perhaps even before, in one way or another. Taxation has resulted in currency, especially coin use. Actually, in ancient period all coins are responsible for government and by government.
In the early days of the ancient empires it might be fair for one healthy pig per year, but this kind of payment was less desirable as the empires expanded. Moreover, empires started to need the means to pay for foreign goods and services, which could be more easily exchanged. Coins of different sizes and metals served instead of brittle, unstoppable letters of paper.
The Coins Trend started:
However, these coins had to be kept secure. Therefore, most wealthy people held accounts at temples in ancient houses without the benefit of a safety steel. Many people, such as priests and temple workers, hoped to be both devoted and honest, always took care of the temples to create a feeling of safety.
In addition to keeping it safe, there are reports from Greece, Rome, Egypt or Ancient Babylon suggesting that temples are loaning the money. The main reason they were ransacked in wars was the fact that most temples were also financial centers in their towns.
Coins could be harvested easier than other commodities, for example pigs for 300 pounds, so a class of rich traders was found that took the interest to lend these coins to needy people. Temples generally handled large loans and various sovereign lending, and the rest were taken up by these new money lenders.
First Bank Introduced:
The Romans, who were themselves great builders and managers, took banking from the temples and formalized it in various buildings. During that time, money lenders continued to benefit as loan sharks do today, but the use of institutional banks involved most legitimate trade – and almost all government expenses.
Julius Caesar gives the first example of how to allow bankers to confiscate land rather than paying loans in an edit that changes Roman law after its takeover. This was a monumental power shift in the relationship of creditor and debtor as nobles landed in most of the past remained unsustainable and passed on debts to descendants until either the lines of the creditor or the debtor died.
The Roman Empire eventually collapsed, but some of its banks lived as Papal bankers emerging during the Holy Roman Empire, and as Templar Cnights during the Crusades. Small – time lenders competing with the church have often been accused of weariness.
Kingdom And the Bank’s
The different monarchs that ruled over Europe noted banks ‘ strengths. As banks and sometimes express charters and contracts of the ruling sovereign existed, royal powers at the Royal Treasury began to take loans to compensate for the hard times, often at the royal terms. This easy financing led to unnecessary extravaganzes, expensive wars and arms race, often leading to crushed debts.
Phillip II of Spain was able to burden his Kingdom with so much debt in 1557, causing the first national bankruptcy in the world — as well as the second, third and quatth in a rapid succession — as a result of many inutile wars. This was because the country was in the process of servicing its debt by 40 percent of the gross national product (GNP). Banks continue to haunt them to this day and age, with the trend of blindness to the creditworthiness of large customers.
The Modern Bank With Adamsmith:
Banking was well established in the British Empire when in 1776 Adam Smith introduced his theory of “invisible hand.” Building on his views on a self – regulating economy, moneylender and bankers succeeded in limiting the involvement of the state in the banking industry and in the entire economy. This free market capitalism and competitive banking has been fertile in the New World, where the US is about to emerge.
At the outset, Smith’s thoughts did not benefit US banking. For a US bank, the average life was five years and most bank notes of defaulted banks were lost. After all, these chartered banks could only issue bank notes against their reserved gold and silver coins. In our age of deposit insurance and the Federal Deposit Insurance Corporation (FDIC), bank robberies meant much more than now.
Alexander Hamilton, the Treasury Secretary, created a national bank to accept banknotes on a par with banks that float through challenging times. After just a few stops, this National Bank began, annulled and resurrected, created a single national currency and set up a system by which national banks supported their bills by buying securities from the Treasury and thereby established a liquid market. The national banks have expelled competition by imposing taxes on the relatively lawless state banks.
The damage was already done, however, as the average American population had already grown into banks and bankers in general. The Texas State would actually banking outlaw this sentiment — a law that lasted until 1904.
How marchent Bank Led The Globe:
In addition to regular banking activities like loans and corporate finance, most of the economic duties that would have been handled in the national banking system came to the power of big market banks because the national banking system was so sporadic. These commercial banks have been working both politically and financially over this period of unrest that lasted until the 1920s.
Initially, they relied heavily on the commissions of foreign bond sales in Europe with a small backflow from the American trading in Europe and thus allowed them to build their capital. These banks included Goldman and Sachs, Kuhn, Loeb and J.P. Morgan and Company.
A bank had no legal obligation at that time, showing its ability to survive on high, hypermedium credit losses, to disclose its capital reserves. This mysterious practice meant that more than anything was the reputation and history of a bank. These family – owned trading banks have long history of successful transactions while starting up banks have come and go. As large industries developed and became necessary for corporate finance, no single bank could supply the required amount of capital and the only means of increasing necessary capital were first – time public bids (IPOs) and public bond bids.
How 1907 changes Bank
The collapse of copper trust shares has created a panic that hastened people to cash out their money from banks and investments that has brought down shares. The task had not been taken to calm people by the Federal Reserve Bank. Morgan stopped the panic by using its significant influence to bring all the main actors on Wall Street together in order to maneuver their control over credit and capital, just as today the Fed would.
The Collapse of First Banking Era:
Ironically, this demonstration of supreme power in saving the American economy ensured no private banker ever again exercised this power. That J.P was needed. The government was moved to form the Federal Reserve Bank, now referred to as the Fed, in 1913 by Morgan, which was a banker that was not like much of America because of being one of its robber baron with Carnegie and Rockfeller. Although the commercial banks had an influence on the Federal Reserve’s structure, they were pushed backwards as well.
Even with the creation of the Federal Reserve, Wall Street concentrated financial power and remaining political power. With the outcome of the First World War, America was made a global creditor and replaced London at the end of the war as the center of the financial world. Unfortunately some unconventional handcuffs have been applied on banking by the Republican administration. The government insisted that all debtor nations should repay their traditionally forgiven war loans, especially in the case of allies, before any American institution extended further credit to them.
This slowed down global trade and led to hostilities against American goods in many countries. The already slow world economy was knocked out, when the stock market collided on Black Tuesday in 1929. It was not possible for the Federal Reserve to contain the crash and refuse to stop the depression, but the effect on all banks was immediate. A clear line between banks and investors has been drawn. In 1933 banks could no longer speculate with deposits and regulations were implemented under the FDIC to persuade the public to return safely. The depression continued, with nobody being fooled.
World war 2 And The Bank
World War II could have prevented complete destruction for the banking industry. WWII has pushed the US and global economies out of the downwards spiral and has produced its industriousness. The war required financial handling with billions of dollars for the banks and the Federal Reserve. This massive funding operation brought about large credit requirements that, in turn, led banks to merge in order to meet the new needs. These enormous banks covered world markets. More importantly, domestic banking in the U.S. finally settled to the extent that an individual would have reasonable access to credit with the advent of deposit insurance and mortgages.
Conclusion how Bank emerged:
Banks have come a long way from the temples, but they have not changed their fundamental business practices. The banks give loans to those that need it, but require interest in addition to repaying the loan. Though history has altered the business model’s fine points, the bank’s objective is to create credit and protect the money of depositors. Even if the future takes banks off your street corner and on the internet — or shops for credit worldwide — there will still be banks to perform this main feature.
How Bank changed The Mankind:
We have talked how Banks Evolved or Developed with time frame in the world. For the shake of mind we have divided whole banks and it’s effect to the Human into Four PARTS :-
- Early period (Enhancement Period Of Banks):-
This is period of early Human civilization, as During Early Period People have only with stones, Axle and equipment. During This period People uses to start store their equipment to the place where it can be stored efficiently and safely. These Place were Banks for them.
- Medieval Period (Banks Works Officialy):
Bank Started work efficiently or it is better to say Bank took Birth I’m the real World. This is period where Trade flourished and enhanced around the world for better present and tomorrow. The states (kings) were superior than everything (There were no RULE OF LAW)
During this Period Currency started to Flourished. These Currency Bring a mode of trade that is in a place of Commodity Currency came To be used.
Hence, currency Become too valuable. Thus, a new trend occour that is BANK ROBBERY. Due to Bank robbery, people start to think Bank are not secured Place to hold there whole earning. Bank become too much trendy place for them.
- Early Modern Period (Banks After world war 2):-
During world war whole world were in economic crisis for the uplifment from the crisis led by world war 2. People started to think about the Bank’s.
The world’s Deflection towards the Bank’s led the Bank too much security, people started to invest or deposite their earning to the BANKS.
Now, Banks starts to become prosperous and regulating authority of economy. Some of them were state owned and Private owned. These Banks starts to work for Development of the world.
- Modern Banks (Banks Lives Today):-
In this section, we will talk about the Bank’s that is live today.
When we enter into the Bank, we see that some person are sitting on the table in the front of computer Beside there some people are standing near them. Simply called customer and staff.
These enhancement led to the upliftment and endorsment to the society of the time. Banks starts to works as creditor and Debtors. We often came to Known Banks are full of NPAs (Non performing Assets).
We use to show how Banks and the world are interconnected with each other from the 1st Human to Modern Society.
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