Questions and Answers
In which century did banking in its modern sense evolve in the prosperous cities of Renaissance Italy?
14th century
Which system do most countries institutionalize for banks, where banks hold liquid assets equal to only a portion of their current liabilities?
Fractional-reserve banking
What is the main role of most banking dynasties mentioned in the history of banking?
Played a central role over many centuries
Which is the oldest existing retail bank?
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What are most countries' regulations intended to ensure for banks, in addition to liquidity requirements?
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Study Notes
Development of Modern Banking
- Modern banking evolved in the prosperous cities of Renaissance Italy in the 15th century.
Banking System
- Most countries institutionalize a fractional reserve banking system, where banks hold liquid assets equal to only a portion of their current liabilities.
Banking Dynasties
- The main role of most banking dynasties mentioned in the history of banking is to provide financial services and manage wealth.
Oldest Existing Retail Bank
- The oldest existing retail bank is the Monte Dei Paschi di Siena, founded in 1472.
Banking Regulations
- Most countries' regulations aim to ensure capital adequacy, in addition to liquidity requirements, to ensure banks' stability and solvency.
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