Tuesday, May 22, 2007

Taking A Healthy Interest Is Nothing New

Modern banks are named after the bench (banco) where an Italian moneylender would once have sat in the marketplace of a Renaissance city. But some historians claim the world's first banks date back much, much further, to the Egypt of some 6000 years ago. Here, a customer's account was kept not in coins or notes, but in cattle - cows and oxen being accepted as local currency.

Borrowers have probably always accused banks of charging excess interest. A clay tablet from ancient Babylon, from about 700 BC, records a loan made by bankers Egibi and Son, of 'two-thirds of a manna of silver ... at an interest of one shekel monthly upon the manna'. Since a manna was worth 60 shekels, this implies an interest rate of about 20 per cent per year - much like the rates charged by banks today.

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3 comments:

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