Evolution of Banking: Historical Practices and Theories
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Evolution of Banking: Historical Practices and Theories

Explore the evolution of banking from its origins with minting of currencies to the development of early banking practices and influential theories such as Adam Smith's 'the invisible hand'. Learn about the role of temples as early banks and the storage of coins in ancient homes.

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@LionheartedJustice

Questions and Answers

The minting of currencies may have originated before the concept of banking.

True

Temples in ancient times functioned as early banks, providing a secure place for coins.

True

The theory of 'the invisible hand' was introduced in the 18th century by Adam Smith.

True

Wealthy merchants emerged as moneylenders, contributing to the evolution of banking practices.

<p>True</p> Signup and view all the answers

Philip II of Spain's excessive debt in 1557 led to the world's first national bankruptcy.

<p>True</p> Signup and view all the answers

Smith advocated for increasing state involvement in banking and reducing competitive capitalism?

<p>False</p> Signup and view all the answers

Alexander Hamilton's establishment of a national bank aimed to destabilize the industry?

<p>False</p> Signup and view all the answers

J.P. Morgan & Co. emerged as a leading merchant bank in the early 1800s?

<p>False</p> Signup and view all the answers

The formation of the Federal Reserve led to the concentration of financial and political power in Wall Street?

<p>True</p> Signup and view all the answers

The stock market crash of 1929 had no impact on the global economy?

<p>False</p> Signup and view all the answers

Study Notes

Origins of Banking and Currency

  • The minting of currencies may have preceded the concept of banking.
  • Ancient temples functioned as early banks, providing a secure place for coins.

Theories and Key Figures

  • Adam Smith introduced the theory of 'the invisible hand' in the 18th century.
  • Wealthy merchants emerged as moneylenders, contributing to the evolution of banking practices.

Historical Events

  • Philip II of Spain's excessive debt in 1557 led to the world's first national bankruptcy.

Development of Banking Institutions

  • J.P.Morgan & Co. emerged as a leading merchant bank in the early 1800s.
  • Alexander Hamilton established a national bank.

Concentration of Power and Global Economy

  • The formation of the Federal Reserve led to the concentration of financial and political power in Wall Street.
  • The stock market crash of 1929 had a significant impact on the global economy.

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