Unsourced material may be other people’s money and how the bankers use it pdf and removed. 1754 BC recorded interest-bearing loans. The goldsmith paid interest on these deposits. Thus, the goldsmiths of London became the forerunners of banking by creating new money based on credit.
London to allow multiple banks to clear transactions. The definition of a bank varies from country to country. See the relevant country pages under for more information. Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank transactions such as cheques does not depend on how the bank is structured or regulated. When looking at these definitions it is important to keep in mind that they are defining the business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purpose of regulating and supervising banks rather than regulating the actual business of banking.
However, in many cases the statutory definition closely mirrors the common law one. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques . Banks provide different payment services, and a bank account is considered indispensable by most businesses and individuals. Non-banks that provide payment services such as remittance companies are normally not considered as an adequate substitute for a bank account. Banks can create new money when they make a loan.