{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

pdfLecture chap1

pdfLecture chap1 - MODULE 1 The Evolution Introduction This...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1 MODULE 1 – The Evolution Introduction This module will discuss the evolution of the banking system throughout recorded human history, from antiquities to contemporaries to modern times. The role of each participant in this process–-whether person, organization or political entity–-will be explored and discussed, and also the role that different economic models and trading activities played in shaping the operation of the global banking system into what we see today. Objectives Upon successful completion of this module, the student should be able to: • Describe the role that the ancient civilization played in formulating the foundation of international banking (IB). • Describe the role of the European dynasties in the evolution of IB. • Describe the role of the various religious organizations in the evolution of IB. • Examine and articulate the role that various economic models played in this undertaking. • Differentiate between the operation of the banking system prior to and after globalization of financial and economic processes and interactions. O ne cannot go through the educational process and complete a curriculum without gaining knowledge in the science of banking and finance, especially the fascinating evolutionary process and history of international banking (IB). It is a mistake to assume that the science of IB and its history is something contemporary. On the contrary, the history of IB goes way back to the time of Hammurabi, the Babylonian king. The code drawn by him contained comprehensive rules and codes pertaining to trading activity and payment agreements. For further information, please see Footnote #1 . Utilization of some sort of medium of exchange as a form of conducting trade started with the past civilizations of the east and the west which evolved to become a form of money as a standard measure for transacting goods and services. Many entities contributed to the standardization of economic transactions and financial activities. To name a few, the Egyptians, Babylonians and Greeks in ancient times were the agents of change in this regard. The Byzantine Empire, the Levantines and the Jews were responsible for the development of private banking and the usury laws. The Bank of Venice, the Bank of England and the Bank of Amsterdam made significant contributions to the development of the banking system and introduction of the usage of precious metals for economic/banking purposes. For further information, please see Footnote #2 . Ironically, the foundation of IB was set by medieval bankers in the middle ages. As industrialization and economic transactions expanded, so did the need for various entities to perform exchange and conversion activity. This ultimately led to the creation of a financial system with two forces determining the borrowing and lending protocol, and the required level of liquidity in the market to satisfy the expected demand for loans. For further information, please see Footnote #3 . Through this beginning, Italian merchants thrived in trading activities,
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}