1.2 Concept, Origin and Development of Bank

The word "bank" is traced to the Italian banco (the money-changer's bench). Early money-lending is ancient; organized banking grew with the merchant banks of medieval Italy. The goldsmiths of London gave the modern deposit business its shape: receipts for deposited gold began to circulate, and the goldsmiths learned that deposits could be lent safely in part because not all depositors return at once. The Bank of England (1694) showed the model of a joint-stock bank serving the state. Modern definitions combine three functions: accepting deposits from the public, lending, and creating credit.