We explain what a bank is and how these financial institutions emerged. Also, the products offered and the types of banks.
What is a Bank?
A bank is a financial institution included in the category of companies. Its main function and reason for existence is to attract clients who deposit their money there and through these deposits to be able to make loans to third parties and include other services.
How did banks emerge?
The first banking transactions are sent to Babylon and Greece in times before Christ. In this last territory, reference is made to the so-called trapezites, who were people who were dedicated to all types of commercial activities. Even so, the most important banking centers of the Ancient Age were the temples, which were in charge of the religious authorities. However, at this time, negotiations were mostly carried out through barter.
There would not be a more formal emergence of these institutions until the Crusades, since they would promote an imperious need to move sums of money from one territory to another quickly. They carried out this by signing documents that could redeem for the corresponding amount in another branch.
Let us remember that, during this period, the church dominated large areas of land managing to obtain enormous amounts of money from donations that came from all over Europe, taxes and income. Furthermore, with the monetary differences, the exchange rate was also encouraged.
The first banks as such were founded in Italy in its main cities, with the background that this country was an important financial and commercial center, in addition to being the headquarters of the Vatican.
The choice of “bank” as the name of these entities corresponds to the fact that the first transactions were carried out on these elements. Its growth, almost at the end of the Crusades, was due to the fact that The banks became the main lenders to the crowns especially from France.
What financial products do you offer?
- Checking accounts
- Savings accounts
- Fixed terms offering interest
- Transactions
- Extractions
- Money deposits or checks
- Credit accounts (through cards)
- Cash Loans/Credits
- Points redemption
- Exchange, purchase and sale of currencies
Types of banks
- Public Administered by the State. Example: Central Bank of the Argentine Republic.
- Private Managed by individuals. Example: HSBC Bank.
- Mixed Administered by the State and by individuals. Both people are shareholders.
- Specialized They cover a specific area. For example, rural or industrial banks.
- Central They have a higher hierarchy than the rest of the banks, since they authorize their operation and regulate them.
- Issue They issue currency in a country. Generally, this activity is carried out by the Public Bank.
- Second floor They are a financial means through which resources are redirected towards certain economic areas that are sought to be developed.
