Banking in the United Kingdom
Encyclopedia
Banking in the United Kingdom can be considered to have started in the Kingdom of England
in the 17th century. The first activity in what later came to be known as banking was by goldsmith
s who, after the dissolution of English monasteries by Henry VIII
, began to accumulate significant stocks of gold.
but, following seizure of gold held at the Royal Mint
in the Tower of London
by Charles I
, they extended their services to gentry and aristocracy as the Royal Mint was no longer considered a safe place to keep gold.
Goldsmiths came to be known as ‘keepers of running cash’ and they accepted gold in exchange for a receipt as well as accepting written instructions to pay back, even to third parties. This instruction was the forerunner to the modern banknote
or cheque
.
Around 1650, a cloth merchant, Thomas Smith
opened the first provincial bank in Nottingham
.
The Bank of England
was created in 1694
The Governor and Company of the Bank of Scotland
was established by an Act of the Parliament of Scotland
on 17 July 1695, the Act for erecting a Bank in Scotland, opening for business in February 1696. Although established soon after the Bank of England
, the Bank of Scotland was a very different institution. Where the Bank of England was established specifically to finance defence spending by the English
government, the Bank of Scotland was established by the Scottish government
to support Scottish business, and was prohibited from lending to the government without parliamentary approval http://www.rampantscotland.com/SCM/story.htm. The founding Act granted the bank a monopoly
on public banking in Scotland for 21 years, permitted the bank's directors to raise a nominal capital of £1,200,000 Pound Scots
(£100,000 Pound Sterling
), gave the Proprietors (shareholders) limited liability
, and in the final clause (repealed only in 1920) made all foreign-born Proprietors naturalised Scotsmen "to all Intents and Purposes whatsoever". John Holland
an Englishman
was one of the bank's founders. Its first chief accountant was George Watson
.
in 1708 restricted banks with more than six partners from issuing bank notes. This had the effect of keeping private banks as small partnerships. Joint stock investment companies were already well established, but joint stock banks did not become well established until the following century.
The Industrial Revolution
and growing international trade increased the number of banks, especially in London. These new "merchant banks" facilitated trade growth, profiting from England's emerging dominance in seaborne shipping. Two immigrant families, Rothschild
and Baring
, established merchant banking firms in London in the late 18th century and came to dominate world banking in the next century.
Many merchant banks were also established outside of London, especially in growing industrial and port cities like Manchester
, Birmingham
, Newcastle
and Liverpool
. By 1784, there were more than 100 provincial banks. The industrialist turned banker could assist his own industry since he not only provided a local means of payment, but also accepted deposits. Here we have a parallel with the early goldsmith banking.
A great impetus to country banking came in 1797 when, with England threatened by war, the Bank of England suspended cash payments. A handful of Frenchmen landed in Pembrokeshire
, causing a panic. Shortly after this incident, Parliament authorised the Bank of England
and country bankers to issue notes of low denomination.
. The National Provincial was the first bank to be considered a truly national bank with twenty branches across England and Wales.
In 1844 the government introduced the Bank Charter Act
to regulate the issuing of bank notes. Two banking collapses, one in 1866 and another in 1878 caused significant reputation damage but in consequence record keeping and accounting improved. The resulting new organisations became huge bureaucracies with a board of directors, general manager, secretary and an army of accounting clerks.
In 1896 twenty smaller private banks formed a new joint-stock bank.
The leading partners of the new bank, which was named Barclay and Company, were already connected by a web of family, business and religious relationships. The company became known as the Quaker Bank, because this was the family tradition of the founding families. This bank eventually became Barclays plc
.
, Lloyds
and Midland
were eventually reined in by government control.
Between the wars, there was a decline to match the general depression of the time. But the banks fought back by taking action to recruit less wealthy customers and by introducing small saving schemes.
It would take until 1950 for real recovery where there was a huge increase in provincial branch offices and the emergence of the high street bank. Relaxation of some controls over mergers and acquisitions led to consolidation
in the 1960s in which the Big Five became the Big Four, along with the takeover of several regional banks (Martins
, District Bank
, National Bank
, Glyn Mills
and William Deacons
). At the same time the government launched a new banking service, the National Girobank
. In 1976 the Banking Act increased the supervisory role of the Bank of England
.
Introduction of computing, credit cards and many new services continued to drive the expansion of banks and as deregulation was introduced competitiveness increased. Banks improved services, refurbished antiquated premises and brought in further technology such as ATM
.
In 2006 the Office of Fair Trading
found that the banks were exploiting penalty bank charges on credit cards and has suggested that banks restrict such penalty to a maximum of 12 UK pounds. Penalty charges or Liquidated damages
are illegal in UK contract law unless they represent the real cost of a breach of contract incurred through an unauthorised overdraft level or bounced cheque.
This ruling by the OFT had been extended by many customers to their personal bank accounts and subsequently the UK small claims court system was flooded with cases of customers reclaiming these ‘illegal’ penalties. It had been reported that nearly 1.8 million template letters to take the banks to court had been downloaded from the website MoneySavingExpert.com
. In October 2009 the Supreme Court
overturned previous rulings allowing the OFT to investigate overdraft charges, bringing to an end such claims. Although initially the OFT said it would look at other ways to pursue the matter in November that year it decided not to continue with further action.
Heads of major British banks met with the governor of the Bank of England
following days of market pressure on lenders' stocks. The Bank of England
told after the 20 March 2008-meeting that participants had "agreed to continue their close dialogue with the objective of restoring more orderly market conditions."http://edition.cnn.com/2008/BUSINESS/03/20/uk.banks.ap/index.html
As of 11 October 2008, the British banks have short-term liabilities equal to 156% of the British GDP or 368% of the British national debt, while the average leverage ratio (assets/networth) is 24 to 1.
Kingdom of England
The Kingdom of England was, from 927 to 1707, a sovereign state to the northwest of continental Europe. At its height, the Kingdom of England spanned the southern two-thirds of the island of Great Britain and several smaller outlying islands; what today comprises the legal jurisdiction of England...
in the 17th century. The first activity in what later came to be known as banking was by goldsmith
Goldsmith
A goldsmith is a metalworker who specializes in working with gold and other precious metals. Since ancient times the techniques of a goldsmith have evolved very little in order to produce items of jewelry of quality standards. In modern times actual goldsmiths are rare...
s who, after the dissolution of English monasteries by Henry VIII
Henry VIII of England
Henry VIII was King of England from 21 April 1509 until his death. He was Lord, and later King, of Ireland, as well as continuing the nominal claim by the English monarchs to the Kingdom of France...
, began to accumulate significant stocks of gold.
17th Century
Many goldsmiths were associated with The CrownThe Crown
The Crown is a corporation sole that in the Commonwealth realms and any provincial or state sub-divisions thereof represents the legal embodiment of governance, whether executive, legislative, or judicial...
but, following seizure of gold held at the Royal Mint
Royal Mint
The Royal Mint is the body permitted to manufacture, or mint, coins in the United Kingdom. The Mint originated over 1,100 years ago, but since 2009 it operates as Royal Mint Ltd, a company which has an exclusive contract with HM Treasury to supply all coinage for the UK...
in the Tower of London
Tower of London
Her Majesty's Royal Palace and Fortress, more commonly known as the Tower of London, is a historic castle on the north bank of the River Thames in central London, England. It lies within the London Borough of Tower Hamlets, separated from the eastern edge of the City of London by the open space...
by Charles I
Charles I of England
Charles I was King of England, King of Scotland, and King of Ireland from 27 March 1625 until his execution in 1649. Charles engaged in a struggle for power with the Parliament of England, attempting to obtain royal revenue whilst Parliament sought to curb his Royal prerogative which Charles...
, they extended their services to gentry and aristocracy as the Royal Mint was no longer considered a safe place to keep gold.
Goldsmiths came to be known as ‘keepers of running cash’ and they accepted gold in exchange for a receipt as well as accepting written instructions to pay back, even to third parties. This instruction was the forerunner to the modern banknote
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
or cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
.
Around 1650, a cloth merchant, Thomas Smith
Smith's Bank
Smith's Bank in Nottingham was one of the earliest banks established in England and was the first English bank outside London.-Thomas Smith :...
opened the first provincial bank in Nottingham
Nottingham
Nottingham is a city and unitary authority in the East Midlands of England. It is located in the ceremonial county of Nottinghamshire and represents one of eight members of the English Core Cities Group...
.
The Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
was created in 1694
The Governor and Company of the Bank of Scotland
Bank of Scotland
The Bank of Scotland plc is a commercial and clearing bank based in Edinburgh, Scotland. With a history dating to the 17th century, it is the second oldest surviving bank in what is now the United Kingdom, and is the only commercial institution created by the Parliament of Scotland to...
was established by an Act of the Parliament of Scotland
Parliament of Scotland
The Parliament of Scotland, officially the Estates of Parliament, was the legislature of the Kingdom of Scotland. The unicameral parliament of Scotland is first found on record during the early 13th century, with the first meeting for which a primary source survives at...
on 17 July 1695, the Act for erecting a Bank in Scotland, opening for business in February 1696. Although established soon after the Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
, the Bank of Scotland was a very different institution. Where the Bank of England was established specifically to finance defence spending by the English
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
government, the Bank of Scotland was established by the Scottish government
Privy Council of Scotland
The Privy Council of Scotland was a body that advised the King.In the range of its functions the council was often more important than the Estates in the running the country. Its registers include a wide range of material on the political, administrative, economic and social affairs of Scotland...
to support Scottish business, and was prohibited from lending to the government without parliamentary approval http://www.rampantscotland.com/SCM/story.htm. The founding Act granted the bank a monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
on public banking in Scotland for 21 years, permitted the bank's directors to raise a nominal capital of £1,200,000 Pound Scots
Pound Scots
The pound Scots was the national unit of currency in the Kingdom of Scotland before the country entered into political and currency union with the Kingdom of England in 1707 . It was introduced by David I, in the 12th century, on the model of English and French money, divided into 20 shillings...
(£100,000 Pound Sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
), gave the Proprietors (shareholders) limited liability
Limited liability
Limited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its...
, and in the final clause (repealed only in 1920) made all foreign-born Proprietors naturalised Scotsmen "to all Intents and Purposes whatsoever". John Holland
John Holland (banker)
John Holland was a founder of the Bank of Scotland, in 1695....
an Englishman
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
was one of the bank's founders. Its first chief accountant was George Watson
George Watson (accountant)
George Watson, was born in Scotland to parents John Watson and Marion Ewing. He was orphaned at an early age, but thanks to his aunt, Elizabeth Davidson, he was sent in 1672 to be educated in book-keeping at Rotterdam. He returned to Edinburgh to become, in 1676, private secretary to Sir James Dick...
.
18th century
During this period, services offered by banks increased. Clearing facilities, security investments and overdraft protections were introduced. An Act of ParliamentAct of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
in 1708 restricted banks with more than six partners from issuing bank notes. This had the effect of keeping private banks as small partnerships. Joint stock investment companies were already well established, but joint stock banks did not become well established until the following century.
The Industrial Revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
and growing international trade increased the number of banks, especially in London. These new "merchant banks" facilitated trade growth, profiting from England's emerging dominance in seaborne shipping. Two immigrant families, Rothschild
Rothschild banking family of England
The Rothschild banking family of England was founded in 1798 by Nathan Mayer von Rothschild who first settled in Manchester but then moved to London. Nathan was sent there from his home in Frankfurt by his father, Mayer Amschel Rothschild...
and Baring
Barings Bank
Barings Bank was the oldest merchant bank in London until its collapse in 1995 after one of the bank's employees, Nick Leeson, lost £827 million due to speculative investing, primarily in futures contracts, at the bank's Singapore office.-History:-1762–1890:Barings Bank was founded in 1762 as the...
, established merchant banking firms in London in the late 18th century and came to dominate world banking in the next century.
Many merchant banks were also established outside of London, especially in growing industrial and port cities like Manchester
Manchester
Manchester is a city and metropolitan borough in Greater Manchester, England. According to the Office for National Statistics, the 2010 mid-year population estimate for Manchester was 498,800. Manchester lies within one of the UK's largest metropolitan areas, the metropolitan county of Greater...
, Birmingham
Birmingham
Birmingham is a city and metropolitan borough in the West Midlands of England. It is the most populous British city outside the capital London, with a population of 1,036,900 , and lies at the heart of the West Midlands conurbation, the second most populous urban area in the United Kingdom with a...
, Newcastle
Newcastle-under-Lyme
Newcastle-under-Lyme is a market town in Staffordshire, England, and is the principal town of the Borough of Newcastle-under-Lyme. It is part of The Potteries Urban Area and North Staffordshire. In the 2001 census the town had a population of 73,944...
and Liverpool
Liverpool
Liverpool is a city and metropolitan borough of Merseyside, England, along the eastern side of the Mersey Estuary. It was founded as a borough in 1207 and was granted city status in 1880...
. By 1784, there were more than 100 provincial banks. The industrialist turned banker could assist his own industry since he not only provided a local means of payment, but also accepted deposits. Here we have a parallel with the early goldsmith banking.
A great impetus to country banking came in 1797 when, with England threatened by war, the Bank of England suspended cash payments. A handful of Frenchmen landed in Pembrokeshire
Pembrokeshire
Pembrokeshire is a county in the south west of Wales. It borders Carmarthenshire to the east and Ceredigion to the north east. The county town is Haverfordwest where Pembrokeshire County Council is headquartered....
, causing a panic. Shortly after this incident, Parliament authorised the Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
and country bankers to issue notes of low denomination.
19th century
On 23 October 1826 a new joint stock bank, Lancaster Banking Company, was formed. However earlier that year the Bristol Old bank had converted from a private to a joint stock bank, making it the first joint stock bank This was quickly followed by other institutions such as the Manchester & Liverpool District Banking Company and the National Provincial BankNational Provincial Bank
National Provincial Bank was a British retail bank which operated in England and Wales from 1833 until its merger into the National Westminster Bank in 1970; it remains a registered company but is dormant...
. The National Provincial was the first bank to be considered a truly national bank with twenty branches across England and Wales.
In 1844 the government introduced the Bank Charter Act
Bank Charter Act 1844
The Bank Charter Act 1844 was an Act of the Parliament of the United Kingdom, passed under the government of Robert Peel, which restricted the powers of British banks and gave exclusive note-issuing powers to the central Bank of England....
to regulate the issuing of bank notes. Two banking collapses, one in 1866 and another in 1878 caused significant reputation damage but in consequence record keeping and accounting improved. The resulting new organisations became huge bureaucracies with a board of directors, general manager, secretary and an army of accounting clerks.
In 1896 twenty smaller private banks formed a new joint-stock bank.
The leading partners of the new bank, which was named Barclay and Company, were already connected by a web of family, business and religious relationships. The company became known as the Quaker Bank, because this was the family tradition of the founding families. This bank eventually became Barclays plc
Barclays plc
Barclays PLC is a global banking and financial services company headquartered in London, United Kingdom. As of 2010 it was the world's 10th-largest banking and financial services group and 21st-largest company according to a composite measure by Forbes magazine...
.
20th century
With the outbreak of war banking flourished and the so called ‘’Big Five’’ commenced a series of takeovers and mergers. These banks, Westminster, National Provincial, BarclaysBarclays plc
Barclays PLC is a global banking and financial services company headquartered in London, United Kingdom. As of 2010 it was the world's 10th-largest banking and financial services group and 21st-largest company according to a composite measure by Forbes magazine...
, Lloyds
Lloyds Bank
Lloyds Bank Plc was a British retail bank which operated in England and Wales from 1765 until its merger into Lloyds TSB in 1995; it remains a registered company but is currently dormant. It expanded during the nineteenth and twentieth centuries and took over a number of smaller banking companies...
and Midland
Midland Bank
Midland Bank Plc was one of the Big Four banking groups in the United Kingdom for most of the 20th century. It is now part of HSBC. The bank was founded as the Birmingham and Midland Bank in Union Street, Birmingham, England in August 1836...
were eventually reined in by government control.
Between the wars, there was a decline to match the general depression of the time. But the banks fought back by taking action to recruit less wealthy customers and by introducing small saving schemes.
It would take until 1950 for real recovery where there was a huge increase in provincial branch offices and the emergence of the high street bank. Relaxation of some controls over mergers and acquisitions led to consolidation
Consolidation (business)
Consolidation or amalgamation is the act of merging many things into one. In business, it often refers to the mergers and acquisitions of many smaller companies into much larger ones. In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group...
in the 1960s in which the Big Five became the Big Four, along with the takeover of several regional banks (Martins
Martins Bank
Martins Bank Limited was a Liverpool-based British finanical services company that was taken over by Barclays Bank in 1969. The company has its origins in the 16th century and was said to have been founded by Sir Thomas Gresham, who began trading in Lombard Street under the sign of a grasshopper...
, District Bank
District Bank
District Bank was a British retail bank which operated in England and Wales from 1829 until its merger into the National Westminster Bank in 1970; it remains a registered company but is dormant...
, National Bank
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
, Glyn Mills
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
and William Deacons
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
). At the same time the government launched a new banking service, the National Girobank
Girobank
Girobank was a British public sector financial institution founded in 1968 by the General Post Office. Itstarted life as the National Giro but went through several name changes, becoming National Girobank, then Girobank Plc , before merging into Alliance & Leicester Commercial Bank...
. In 1976 the Banking Act increased the supervisory role of the Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
.
Introduction of computing, credit cards and many new services continued to drive the expansion of banks and as deregulation was introduced competitiveness increased. Banks improved services, refurbished antiquated premises and brought in further technology such as ATM
Automated teller machine
An automated teller machine or automatic teller machine, also known as a Cashpoint , cash machine or sometimes a hole in the wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public...
.
21st century
Currently banks in the United Kingdom have refined their services with most offering very similar services being distinguished only by offering different interest rates. Indeed a very recent trend has been to not advertise interest rates as this avoids the banks having to offer such advertised rates to at least 60% of their customers.In 2006 the Office of Fair Trading
Office of Fair Trading
The Office of Fair Trading is a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...
found that the banks were exploiting penalty bank charges on credit cards and has suggested that banks restrict such penalty to a maximum of 12 UK pounds. Penalty charges or Liquidated damages
Liquidated damages
Liquidated damages are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach ....
are illegal in UK contract law unless they represent the real cost of a breach of contract incurred through an unauthorised overdraft level or bounced cheque.
This ruling by the OFT had been extended by many customers to their personal bank accounts and subsequently the UK small claims court system was flooded with cases of customers reclaiming these ‘illegal’ penalties. It had been reported that nearly 1.8 million template letters to take the banks to court had been downloaded from the website MoneySavingExpert.com
MoneySavingExpert.com
MoneySavingExpert.com is a British consumer finance information and discussion website founded and owned by financial journalist Martin Lewis in February 2003 with the aim of providing information and journalistic articles enabling people to save money....
. In October 2009 the Supreme Court
Supreme Court of the United Kingdom
The Supreme Court of the United Kingdom is the supreme court in all matters under English law, Northern Ireland law and Scottish civil law. It is the court of last resort and highest appellate court in the United Kingdom; however the High Court of Justiciary remains the supreme court for criminal...
overturned previous rulings allowing the OFT to investigate overdraft charges, bringing to an end such claims. Although initially the OFT said it would look at other ways to pursue the matter in November that year it decided not to continue with further action.
Heads of major British banks met with the governor of the Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
following days of market pressure on lenders' stocks. The Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
told after the 20 March 2008-meeting that participants had "agreed to continue their close dialogue with the objective of restoring more orderly market conditions."http://edition.cnn.com/2008/BUSINESS/03/20/uk.banks.ap/index.html
As of 11 October 2008, the British banks have short-term liabilities equal to 156% of the British GDP or 368% of the British national debt, while the average leverage ratio (assets/networth) is 24 to 1.
See also
- 2008 United Kingdom bank rescue package2008 United Kingdom bank rescue packageA bank rescue package totalling some £500 billion was announced by the British government on 8 October 2008, as a response to the ongoing global financial crisis. After two unsteady weeks at the end of September, the first week of October had seen major falls in the stock market and severe worries...
- 2009 United Kingdom bank rescue package2009 United Kingdom bank rescue packageA second bank rescue package totalling at least £50 billion was announced by the British government on 19 January 2009, as a response to the ongoing global financial crisis. The package was designed to increase the amount of money that banks could lend to businesses and private individuals...
- Banks of the United KingdomBanks of the United Kingdom-Independent British retail banks:The table shows the main independent British retail banks, in order of market capitalization. The list is quite short as British banking has been highly consolidated since the early 20th century. Unlike some other major economies, the UK does not have a major...
- Banknotes of the pound sterling
- BankBankA bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
- Bank regulationBank regulationBank regulations are a form of government regulation which subject banks to certain requirements, restrictions and guidelines. This regulatory structure creates transparency between banking institutions and the individuals and corporations with whom they conduct business, among other things...
- Banking in the United StatesBanking in the United StatesBanking in the United States is regulated by both the federal and state governments.The U.S. banking sector's short-term liabilities as of October 11, 2008 are 15% of the gross domestic product of the United States or 43% of its national debt, and the average bank leverage ratio is 12 to...
- Financial institutionFinancial institutionIn financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries...
- History of bankingHistory of bankingThe first banks were the merchants of the ancient world that made loans to farmers and traders that carried goods between cities. The first records of such activity dates back to around 2000 BC in Assyria and Babylonia...