BANKING
A bank is
a financial
institution that
accepts deposits from the public and
creates credit.[1] Lending activities can be performed either directly or indirectly
through capital
markets. Due to their
importance in the financial stability of a country, banks are highly
regulated in
most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only
a portion of their current liabilities. 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,
known as the Basel
Accords.
Banking in its modern
sense evolved in the 14th century in the prosperous cities of Renaissance Italy but in many ways was 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 Fuggers, the Welsers, the Berenbergs, and the Rothschilds – have played a central role
over many centuries. The oldest existing retail bank is Banca Monte deiPaschi di Siena, while the oldest existing merchant bank is Berenberg Bank.