Saturday, February 16, 2013

The History of Banking

Yesterday we talked about the development of banking as one of the consequences of the Industrial Revolution. Banking activity appeared in Mesopotamia and started developing as an economic activity in the Middle Ages, but it really became important since the Industrial Revolution. As we studied yesterday, banks assumed different roles, such as facilitating payments, lending money to the people who wanted to start a business or investing directly in a certain business. Central banks also appeared in the 19th century. They tried to have the monopoly of creating money. In fact, they create material money (banknotes), but private banks also create money with their activity of borrowing  and lending money. The lack of control of these activities has been one of the reasons of the crisis we are going though nowadays. 

If you want to learn more about banks, here you have an interesting animated  documentary called Money as Debt. It was written and filmed by Paul Grignon, a Canadian filmmaker




If you prefer, you can watch the Spanish version  (El dinero es deuda) on the following link: 



This is another interesting video about how money is created: 
Money Creation



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