Banking

An early from of banking was the money lending carried on in Florence and other northern Italian cities during the Middle Ages. In fact, the world "bank" comes from the Italian word banca, meaning the "bench" or "counter" on which the money was displayed.
As trade flourished in Italy and trought out Europe, money became so important that ways to protect it and handle it wisely had to be found. In the 17th and 18th centuries, commercial banks were set up. Before that ways, it was not easy for people to find safe places for their money. Thefts or fires could deprive people of all their savings.
The early European commercial banks were privately owned. Their chief business was to help merchans finance trading activities. These banks accepted deposits of money, collected bills for sellers. And acted as exchanges house for converting the money of one country into the money of another. They also extended loans to their depositors to help them pay for shipping and storing their wares.
Some of these private banking establishments were owned by individual families. The famous Medici family, which ruled Florence for three centuries, got its power and influence through the bank founded by Giovanni de’ Medici in the 14th century.
One of the most interesting and successful family banking enterprises was the House of Rothschild. The founder was Meyer Amshel Rothchild, who started as a moneylender in Frankfurt, Germany. In the second half of the 18th century, Rothschild’s shrewdness and good financial sense made the firm a solid success. In addition to the frankfrut office. Offices were opened in London, Vienna. Paris, and Naples. Each office was directed by one of Rothschild’s five sons. Close co-operation among the five branches, together with shrewd but honest business dealings, soon made the Rothschilds extremely wealthy. During the 19th century the Rothschilds became famous as moneylenders to European governments.
Alarge portion of the business of early commercial banks involved foreign trade. Thus banks naturally came to be located in important seaport cities. These cities such as London, Amsterdam, and later, New York became the first financial center. They have continued to banking center.