Bank Role in a Nations Economy Research Paper Example | Topics and Well Written Essays - 1250 words

Bank Role in a Nations Economy - Research Paper Example Nevertheless, a discussion of a short history of banking would provide a good background on the role of this financial institution two centuries ago. As mentioned before, storehouses were considered banks Nevertheless, even when barter was replaced by currency, the existence of a bank as a financial institution was not yet fully established. In fact, Hildreth ( 1837) wrote that the first bank in Genoa, Venice came into being only after the Republic ended. Hildreth recounts : â€Å"The Republic is engaged in war, and falling short of funds, had recourse to a forced loan. The contributors to that loan, were allowed an annual interest of four percent on the sums they had been obliged to lend; certain branches of the public revenue were assigned for the payment of that interest; and a corporation, entitled the CHAMBER of LOANS, was created for the express purpose of looking after this business, managing those branches of the revenue assigned to the lenders ; and attending to, and securing the punctual payment of the interest, as it fell due†( Hildreth, 1837,p.5) The Chamber fulfilled some of the roles that modern-day banks do such as selling and exchange, lending money, circulating money, and accepting deposits. Later the Chamber was known as the Bank of Venice. From then, banks sprouted into different cities such as Genoa and Barcelona since they engaged in so much trade too. In our current time, banks have played roles not much differently from the Bank of Venice. Only, the banking industry has become more complicated as international trade became dynamic and currency exchange from different countries have grown.