Ancient Babylonian records dating from the 18th century BC show that a rudimentary form of banking was established at that time (Leick 161). Although these early storehouses could not necessarily equate with modern banks, they did serve the purpose of storage of wealth in the form of grain, gold and other valuables. From these immense storehouses, people chose to lend and borrow based on agreements made on a person-to-person basis. Financial relationships such as these expanded in the following centuries and we can see evidence of basic banking centres from the Greeks, the Egyptians and Romans. As banking progressed, the idea of storing wealth became more complicated as people tried to decide of fair ways of paying back loans on various items (Smith 4). Seeds, which could reproduce and therefore become worth more in the end, would require an equal repayment that included interest; this was an idea that quickly took hold and has helped to define modern banking (Heichelheim 56). After the Roman Empire lost its power, banking actually became a derelict practise in most of Europe until centuries later. When it was revived in later years, banking gained the addition of one factor that would revolutionise it: hard currency (Butler et al 27).
Currency became redeemable for actual products when prior to its advent, financial exchanges were completed with the end product already in hand (for example, gold exchanged for a certain amount of grain, or grain for eggs). Currency became the primary source of finance instead of a mere representation of 'true' finance; based on currency, interest rates and the need for people to store their wealth away safely, banks were conceived and have persevered until now. It is still to accomplish these basic financial goals that banks exists today and are virtually indispensable to companies, governments and individuals (De Macedo et al 88).
Evolution of Banking and Financial Control
Today, banks exist as financial centres in that they are payment agents, debt collectors, lenders and borrowers. Banks collect individual and company money in what is technically a borrowing agreement on the part of the bank; the money is then used to invest in various industries and may be collected by the lender (the customer) at any time. Similarly, customers can borrow money from the bank on the stipulation that they agree to pay interest on top of the borrowed amount. Customers can ask their bank to pay bills from the credit amount in their accounts, or they can negotiate credit lines and retirement savings funds if they wish. This basic modern method of banking is generally credited to the influence of the London Royal Exchange, founded in 1565 (Michie 134).
The Royal Exchange was responsible for the evolution of the term banker, but also for a now defunct hierarchy among the moneylenders themselves, determined by the customers they dealt with. The top moneylenders dealt with heads of State, while the next ranking dealt with city officials; the bottom rung of moneylenders were responsible for