The basic principle of banking remain much unchanged since the middle ages when the merchant’s needed a safe place to store the gold and wealth. Goldsmith of that area had the biggest safe and would often offer to store the merchants gold and silver securely for a fee.
The enterprising goldsmith realised that only a few customers would ever want to withdraw their gold, this meant that there would always be a certain amount of gold stored in their safes. The Savvy Goldsmith in Italy, Genoa, realised that other merchant’s would want to take out loans and they would loan out other people’s gold for a fee ensuring that there would be sufficient amount’s left in the vault in case a customer wanted to withdraw their wealth, sound familiar.
This is the true essence of banking which has not changed much since those medieval days.
They just charge now more extortionate rates for their loans and services.
