Even before man had discovered that most delicious, but necessary evil, money, banks existed. The very earliest banks would have simply been used to store a person's wealth against theft and loss. This wealth may have only been grain or, a little later, any gold objects that were owned. However whatever was stored would have been precious to its owner.

Before we had money, but had goods, bartering came into being. This was a way to pay for something or to get something done. If you had a chicken which someone wanted, and that person was able to help you dig a field, you were usually able to strike up a bargain.

Eventually certain commodities became more valuable than others and as such needed protection from theft and loss. Hence the arrival of the early banks. In the bible we read about the money lenders at temples and Christ's abhorrence of them. By medieval times, with the use of money, established trading was apparent. In the Western world, by the 13th Century, the Papal banks were the most efficient and successful in operation. This is a strange fact, considering the bible passages about Christ and banks.

Our modern day Western banking institutions have evolved from the trading coffee houses of 16th century England. The London stock exchange was actually developed from these coffee houses. At one time, as the owners would hear much gossip, about how successful or not some businesses were, they would post a list of these details on their doors. These lists led directly to the establishment of the stock exchange in London.

In the mid 17th Century the first banknotes and cheques came into circulation. The first bank issuing notes were founded in North America in 1681. By the mid 18th century many well known banks were founded, such as Barclay's which exists to this day.

These early banks often had precarious, short lived existences. Obviously nowadays, as banks have been established for so long, they have vast funds which they can rely on. However in recent months some English banks have experienced financial difficulties. Early banks though were often going out of business and suffered at the hands of bad debtors.

In the 20th Century, with the Wall Street Crash, many people suddenly found that their attempt at saving, and keeping financially sound, had all been in vain. Banks closed their doors in an attempt to sort out some problems, and so our term 'Bank Holiday' came into being. Many older people have kept a fear of banks from this period of time, choosing to keep any money at home instead of in a bank.

However, as our salaries are paid into banks nowadays we are more reliant on banks than ever. The present day has seen banks undergoing many changes in their system of working. With the ever increasing use of computers pretty much everyone these days uses credit cards, telephone banking and Internet banking. However, although it is easy to forget that banks can have financial difficulties, it is sill possible, although hopefully not likely.

Learn more about this author, Ethel Smith.
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