Modern Day

          At the moment, banks have become a very important aspect of people’s life. Banks are available everywhere and there are many types of banks. Also they have many more roles than before such as saving money over several years with benefits and offers for big loans. In Investments banks, you can trade in your account stocks and bond issues, advised by consultants. Banks includes new service such as credit cards and this service has become very popular these days and make our life style dependent on credit.

Development of Banking

        The advance of banking started in the 17^th and 18^th century. Firstly at the end of the 16^th and during the 17^th century , the issuing of bank debt served as a substitute for gold and silver coins. This combined with the traditional banking functions of accepting deposits, moneylending, money changing and transferring funds. New banks promoted commercial and industrial growth by providing the safety of payments and a money supply more responsive to commercial needs. By the end of 17^th century, banking was becoming important to combative European states, and funding requirements changed.

In the 18^th century in London the Bank of England had a large partnerships banned. However the end of this century many people kept their own deposit account with the bank of England. In the 19^th century, finance required for the  Napolenic wars led to an explosion of railroads in Europe, and this also resulted in the public and trading more .

By 1907, the 20^th century, there was a financial loss of confidence in the US, which led to numerous runs on banks which became known as the bankers panic. In the crash preceding the Great Depression in 1929 margin requirements were only 10% and brokerage firms would lend 9$ for every 10$ an investor had deposited. When the market went down brokers called it loans, which couldn’t be paid back. Everyone had problems, bankers failed and it led them to lose billions of dollars. So debtors defaulted on debt and depositor attempted to withdraw their savings. The debts became heavier because the income prices fell by 20 to 50%, but debt remained at the same amount. 744 US bankers failed during the first 10 months of 1930 after the panic. Around 7 billion $ in deposits had been frozen in the failed banks, in April 1933.

In the Bretton Woods system in 1944 during the post Second World War period, two organizations were created: the International Monetary Fund (IMF) and World Bank. These institutions encouraged commercial banks to lend sovereign states in the Third World.In addition, the first (ATM) Automated Teller Machine or Cash machine appeared by the end of the decade in 1960. After this banking started to develop in many ways and became heavy investors in computer technology. The first payment system started to be developed that would lead to an electronic payment system in 1970s, for both international and domestic payments. In the 1980s and 1990s there was a great increase in demand from companies, governments, and financial institutions for this service.