Banking: Now and in Ancient Times: They May Not Have Had Internet Banking, but the Ancient Egyptians Pioneered Many of the Practices Rooted in Our Modern Banking Systems. Tony De Joux Draws Some Comparisons with His Home Country of New Zealand

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Banking in Egypt was more sophisticated for its time than banking in other countries and--thanks to the invention of papyri--there is plenty of paper evidence of ancient banking practices.

In the period in question between 260BC and AD260, Egypt had already been conquered by Alexander the Great and would in turn be conquered by the Romans.

We can be pretty certain about what banks in Ancient Egypt did, enabling a comparison with our banking system

Banks were receivers and distributors of state funds. They collected taxes and made payments on the order of the royal scribe or other officials.

They were also bureaux of exchange but loans at interest were by way of private initiative and by private contract.

Banks, however, were not promoted as savings institutions: As Garnsey, Hopkins and Whittaker note in Trade in the Ancient Economy, there was no "moral reinforcement" for productive investment or profit maximisation in ancient societies.

"There was no heavenly salvation promised to the puritanical saver," the authors wrote. "Instead, high status involved competitive and ostentatious expenditure."

Because banks in Greco-Roman Egypt did not participate in lending, they were not strictly banks in our modern terminology, but were most certainly financial institutions.

Banking defined

The present day word "bank" derives from the [Genoese] Italian "banc[h]a"--the banker's table. What is a bank? It's not an easy question to answer, because banking covered more than one occupation in the ancient world

The Romans had several words: argentarius: a money changer; argentaria: a banking or money changing house; mensarius nummularius: a public banker, in particular one who regulated the paying of public monies; and coactores agentarii: a collector of money.

In contrast, the Greeks had only one word: trapezitai, or tables, which still serves today as their word for bank. Greek banking, however, consisted largely of money lending and exchanging the currencies of different Greek states.

The Egyptians had four types of bank: the public or royal bank, the notarial bank, the exchange bank and the private bank

Jean Andreau, who authored La Vie Financiere dans le Monde Romaine, probably has the best definition of a bank: "a commercial profession which consists of receiving the deposits of clients, to whom the banker furnishes the services of a cashbox, and in lending the available funds to third parties as a creditor".

Trevor N. Bright, in modern New Zealand, was more succinct "The short definition of banking is that it is a trade in money and credit" (Banking Law and Practice in New Zealand)

He noted customers of banks do not have "their" money in the bank, but that the bank gives credit on account, mixing the money with its own funds which it invests in part and retains in parts it pleases.

While care must be taken in comparing ancient and modern banking systems on the basic level, the broad ideas have not really changed significantly in more than 2200 years.

While it would be a mistake to ascribe to the ancients the degree of sophistication that we have today, it should be remembered that as recently as the 1960s both New Zealand and overseas banking systems were not particularly sophisticated.

Because they did not offer lending facilities, banks in Greco Roman Egypt were, technically speaking, not banks but financial institutions

The banker

What is a banker? Until relatively recent times, bank and banker were synonymous. It was only with the rise of the largo publicly owned banks that the term "banker" became attached to the executives of a bank. Those who made decisions were bankers and those whom they employed were called clerks of similar terms.

In the US, where there were (and in some cases still are) small banks in small communities, the bank president more closely resembled a "banker". …