Origin Of Banking Activities 1

Course : Managerial Finance Lecture : Marc Credit Hours : 3 Credits Semester Sessions : 3 Semester, 2021/2022 Session Prepared By : Kenzo LECTURE NOTES Origin of Banking Activities Trading through exchange has long been known to people man. Before the current monetary system, there is already an exchange through a barter system. Second difference This system is clearly visible from the instruments used. In the monetary system exchange is the means of payment is money consisting of coins and paper money. On When the monetary system was first introduced, money was made from coins precious metals such as gold and silver. As a guarantee, that is gold and silver contained in these precious metals. Likewise, the value of money depends on the weight of the metal glorious. In subsequent developments, money is no longer just money made from metal pieces, but already using paper. The guarantee given is not on paper value, however lies in trust in the country that issued it. Meanwhile, the nominal value of money is printed in that money published by each country. In the barter system, the payment instrument is used are goods or services. The exchange system is carried out between goods with goods or services with goods or services with service. In practice, the barter system was already known before today's monetary system. It's just in the system There are several obstacles to bartering, such as difficulty finding people who want to exchange goods or services that suit our tastes. It is then difficult to determine the value of each goods to be exchanged. According to developments era and some of the weaknesses that exist in the barter system, then slowly, the barter system began to be abandoned and entered monetary system. However, in this case it does not mean a barter system no longer used. In certain transactions in the pedalan or between countries the barter system is still carried out. The presence of a monetary system in the world of trade too is the forerunner to the birth of financial institutions. System monetary which uses money as a means of payment need a bank as a place to print, organize, and overseeing a country's financial circulation. Bank presence in the monetary system it is the blood and backbone a country in order to streamline its monetary system used in all countries in the world. In the development of banking, history records its origins The introduction of banking activities occurred during the kingdom era in mainland Europe. This business then expanded to West Asia brought by traders. Further developments banking quickly spread to the continents of Asia, Africa and America which was brought by Europeans when they did colonization of the colonial countries. The first banking activity is exchange services Money. Therefore, in banking history, banks are known as a table where money can be exchanged. Money exchange is done traders between one kingdom and another kingdom. Money exchange activities are still carried out today. Money exchange activities are currently known as traders foreign exchange (money changer). Banking operational activities then developed more complete as a place to store money or what is called now this is a savings activity. Next are banking activities increased further by the activity of lending money (giving credit). The money that the public entrusts to the bank in the form of savings is lent back to the public who need it in the form of a loan or credit. In subsequent developments, bank services developed in accordance with the times and needs of society which is increasingly diverse. With increasing needs society will want financial services, then the role of the banking world increasingly needed by all levels of society, both those who exists in both developed and developing countries. For example services money transfers, securities collection services, letter services of credit, bank guarantee services to credit card services. Even credit card services have been able to replace some of them from the function of money as a means of payment. In short, mature The development of the banking world is increasingly rapid and modern. Banking increasingly dominates human life, especially in relation to the economy and business of a country. Even banking activities and existence when determining progress a country.