A Brief Chronology of U.S. Banking Regulations

Abstract

The practice of banking predates the introduction of standardized currency in the form of coins. Coins evolved from measures of weight. The earliest known coins date back to the seventh century BC and were in circulation in the Lydian kingdom, which is part of present-day Turkey. Ancient Greek and Babylonian temples functioned as the world’s oldest banks. Banking declined in importance after the spread of Christianity, as charging interest was viewed as immoral, but was revived in the Middle Ages to raise funds for the Crusades with the aid of the Templars and the Hospitallers. Italy eventually became the birthplace of modern banking. The first known foreign exchange contract occurred in Genoa in 1156 when two brothers borrowed in Genoese pounds and repaid the amount in bezants in Constantinople. Accountants working for the House of Medici in Florence developed the double-entry bookkeeping method for recording credits and debits. Banca Monte dei Paschi di Siena, founded in 1472 in Siena, is currently the oldest operating bank in the world. Sveriges Riksbank of Sweden became the world’s first central bank when it began its operations in 1668. In the sixteenth and seventeenth centuries, London, Amsterdam, and Hamburg became the new financial capitals, mostly from the thriving trade of the various East India Companies.