A bank is a lender that accepts deposits from the general public and creates credit. Lending activities can be carried out either directly or indirectly through capital markets. Because of the importance in the financial stability of any country, banks are highly regulated generally in most countries. Most nations have institutionalized something known as fractional reserve banking under which banks hold liquid assets add up to only some of these current liabilities. Furthermore to other regulations designed to ensure liquidity, banks are usually at the mercy of minimum capital requirements predicated on an international group of capital standards, known as the Basel Accords.
Banking in its modern sense evolved in the 14th century in the prosperous cities of Renaissance Italy however in many ways was a continuation of ideas and concepts of credit and lending that had their roots in the ancient world. In the annals of banking, lots of banking dynasties – notably, the Medicis, the Fuggers, the Welsers, the Berenbergs and the Rothschilds – have played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena, as the oldest existing merchant bank is Berenberg Bank.
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