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Like most of us, you keep your money in a bank account. Simple. But have you ever wondered: what did people do with their money before banks came into existence? Before we had such privileges, people stored all their money in kitchen pots and “pig jars”. Over time, banking institutions were founded, with the earliest modern banks arriving in Italy during the medieval and early renaissance period. In fact, the word “bank” comes from the Italian term “branco”. Some of the oldest banks in the world have been in continuous operation for several centuries.
Banca Monte dei Paschi di Siena
Banca Monte Dei Paschi di Siena is the oldest surviving bank in the world. It was founded in 1472 in the Tuscan city of Siena, which at the time was a republic. The bank was created to offer loans to “poor or miserable or needy persons”, and it soon expanded its operations throughout the entire country after Italy was unified. While it has managed to survive all these years, the bank has had mounting problems since the 2008 financial crisis, when it was forced to recapitalise. In 2013, the bank confirmed a loss of 730 million euros. Like many banks, it has scrambled to raise capital to avoid getting shut down. Today, Banca Monte dei Paschi di Siena is the fourth largest commercial and retail bank in Italy.
Berenberg bank is the second oldest in the world after Banca Monte Dei Paschi di Siena, and it’s also the world’s oldest merchant bank. Dutch Protestant brothers, Hans & Paul Berenberg established the Hamburg-based bank in 1590. It grew during a time of prosperity in Hamburg, as the city was becoming a hub for financial and trading activity in the late 16th century. Over the years, the Berenberg bank has stayed remarkably true to its roots. To this day the bank is still part-owned by the original founders’ descendants.
The world’s oldest central bank, Sveriges Riksbank was founded from the ruins of Stockholms Branco, in 1668. In contrast to a commercial bank, a central bank controls the money supply and prints the national currency. The Swedish bank was established under the control of the Riksdag of the Estates - Sweden’s second highest authority, after the king, at this time. This decision had been made to prevent the king from interfering with the bank’s affairs. The previous bank collapsed under the king’s control, due to printing too many notes. When a new Riksdag was instituted in 1866, the name of the bank changed to Sveriges Riksbank. Maintaining price stability was one of the Riksbank’s first tasks. Sweden was the first country in Europe to issue banknotes. It has managed to withstand the financial crisis and today is the world’s third oldest bank.
C. Hoare & Co.
In the days before street numbering, people used signs to identify shops and businesses. Sir Richard Hoare established his bank at the ‘sign of the golden bottle’ in Cheapside, London. C. Hoare & Co. was founded on 5th July 1692 and the bank quickly evolved throughout the 17th and 18th century. In 1690, Hoare moved the business to Fleet Street, the site of today’s office, that’s owned and managed by Hoare’s direct descendants. The bank has an enormous history and has faced notable change, such as being rebuilt in the 19th century. The bank survived a fire in WWII that broke out during an air raid. It is the oldest bank in the UK and much of its history can be explored in the C. Hoare & Co. museum.
Two years after C. Hoare & Co, the Bankhaus Meltzer was born. The founder Benjamin Metzler moved to Frankfurt in 1671 and worked as a bookkeeper, before creating his own trading business. In the early 1670's, the company started its transition into a bank by switching their focus to offering financial services instead of stockbroking. In 1986, the bank was converted from a partnership to a limited company to strengthen its capital base and independence. It has followed a steady path and its independence has become a distinctive aspect of the company. The Metzler family still play a key role in the bank’s ownership, but it now has multiple partners in management from outside the family.
The banking world has evolved immensely over the years. One of its biggest change came rather recently when the mobile banking app was introduced in 2010. The fact the oldest banks in the world are still standing is a testament to their ability to move with the times. They’re rich with culture and history, and with the right support, they can thrive for many years to come.
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