"Modern
banking has its auspicious beginnings in the early to mid Middle Ages.
Primitive banking transactions existed before, but until the economic
revival of the thirteenth century they were limited in scope and
occurrence. By the dawn of the twelfth and thirteenth centuries, bankers
were grouped into three distinct categories: the pawnbrokers, the
moneychangers, and the merchant bankers. But with these economic
specializations came religious denunciation and backlash. However, these
bankers persevered and a new industry was born."
"Some citizens found it convenient to deposit some of their money in a
bank account and receive a moderate interest (often camouflaged as an
optional bonus) while using the account for receiving and making
payments by written transfer in the banker's book. A reliable depositor
was often allowed to overdraw his account within certain limits. The
banker, in turn, was entitled to invest in his own trade the deposits of
his clients. A merchant created feedback credit by charging a banker
(or, another merchant) with supplying foreign exchange in a foreign
place, while agreeing overtly or covertly that he would waive repayment
abroad in order to receive postponed payment in the currency and place
of origin."
"While the organization of the moneychangers business seems family
oriented, individual changers occasionally pooled their resources in
partnerships. Such enterprises were small, characteristically involving
two or perhaps three changers. The term of individual partnership
arrangements was usually short, three months to a year. But once two
changers came together they tended to remain as such for a considerable
time by successively drawing up new partnership arrangements."
