0: - [Narrator] Hey, everybody.

0: Welcome to the Let's Teach channel,

2: where we research interesting facts and share information

5: on just about any topic.

7: In a previous video,

8: I talked about the violin and the viola.

10: Two instruments that look similar to each other,

13: but couldn't be any more different.

15: If you're interested in learning more about this,

16: then be sure to check that out.

19: In this video, I'll be answering the question,

21: how did banks start?

23: Let's get started.

24: The exact origins of banking, as we know it,

26: remain shrouded in mystery;

28: however, people first began to record their trades

31: and financial transactions around 8000 B.C.

34: In fact, archeologists have managed

36: to unearth several of these logs,

38: and they can be seen in museums around the world today.

41: Besides these logs, there is also evidence

43: that there were credit and lending services

45: in ancient Mesopotamia,

47: although these dealt primarily with seeds,

49: to allow farmers to work, rather than money.

53: These types of activities were also seen

55: in Asian civilizations.

57: So let's talk about the Medieval Banks.

59: The idea of banking as an institution

61: was formalized during the Medieval Period.

64: Although the majority of these were merchant banks

66: that provided funds for traders traversing the Silk Road.

70: When they failed to deliver on their promised returns,

73: they were declared banca rotta,

75: which is where the term "bankrupt" originates from.

78: By this point,

79: Italy had become the center of the world's banking industry,

82: since most of the earliest banks were found there.

84: Among these was the Medici Bank,

87: which was established by the Medici family in 1397.

91: During its heyday, it was the largest

93: and most reputable bank in Europe,

95: bringing in a great deal of wealth, influence,

97: and power for the family.

98: Unfortunately, it shut down sometime in 1499

102: after suffering devastating blows

103: in Lyon, London, and Bruges.

106: After the downfall of the Medicis,

108: other banking families came to take their place,

110: including the Grimaldis, the Spinolas, the Pallavicinos,

114: the Dorias, and the Pinellis.

116: Let's talk about the modern banks.

118: The banking system that we know today

120: was developed between the 17th and 19th centuries

124: when English merchants began to store their valuables

126: with the goldsmiths of London,

128: most of whom possessed private vaults

130: that they rented out as safe and secure repositories.

134: As the years passed, though,

135: the goldsmiths also started offering loans

137: and lending services on behalf of the depositor,

140: which led to the emergence of promissory notes.

143: Banknotes were first seen in 1695

145: when the Bank of England began to issue them.

148: These were initially actual notes

150: that debtors and creditors scribbled on.

152: However, standardized printed ones

154: started being issued by the mid 18th century.

158: When the United Kingdom

158: experienced its Industrial Revolution,

161: banknotes played a crucial role

163: in sustaining their heightened economic activity.

166: These were exacerbated by the practices of the Rothschilds

170: an immigrant family that loaned money to the Bank of England

172: and purchased stocks.

174: They also started countless other activities,

177: including investing in global projects,

179: financing military efforts, taking deposits from the public,

182: and creating new banks.

184: Thanks to the efforts of the Rothschilds,

186: banking as a legitimate financial and social institution

189: was developed.

190: This also increased their wealth by a hundredfold,

193: and they remain the richest family in history today.

196: In the 20th century, banks, as we know them,

199: started to pop up.

200: The post-war years saw them lending massive amounts of money

203: to repair and sustain countries

205: that were left extremely damaged by wartime,

207: which led to the creation of services

209: that are still very much in use today,

211: such as ATM systems and SWIFT payments.

214: However, this century was also marked

216: by several massive bank failures.

219: For instance, the Wall Street Crash of 1929

222: resulted in debtors defaulting on their debt

224: and hordes of depositors withdrawing their money,

227: which triggered bank runs.

228: Despite assurances from the government

230: and the Federal Reserve,

231: the public's panic and anxieties were not sated.

235: In 1944, the International Monetary Fund or IMF

239: and the World Bank were created,

241: which spurred smaller commercial banks

243: to lend to third-world countries to boost their economies.

246: These organizations,

247: along with the deregulation of financial markets later on,

251: further developed banks and banking.

254: Today, included in the list of biggest banks in the world

257: are JPMorgan Chase, China Construction Bank,

260: Bank of America, Wells Fargo, and Citigroup.

264: All these institutions have annual revenues

266: that lie north of a billion dollars,

268: helping sustain the economic activities

270: of countless nations.

272: Well, that's it for this video.

274: Nowadays, there are plenty of people

275: who don't have a bank account.

277: What do you think about that?

278: Let's talk about it in the comments below.

280: Don't forget to like the video and subscribe to the channel,

283: and hit that bell notification button,

285: so that you'll know whenever a new video is uploaded.

287: And remember, what's learned here, leaves here.

291: Share something you learned

291: about banks and their history with a friend.

294: See you later.