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Basic Information

A bank, and by extension the business of banking, is an undertaking which deals in the hiring out of money as a commodity in its own right (as opposed to trading in commodity money)1. As part of this, and of involvement in the money trade more generally, various banks may also involve themselves in capital investment, commodity trading and other similar activities. Early banks may issue letters of credit whilst later ones may even issue their own fiat money (whether commodity backed or otherwise) - it's also possible for a bank to operate its own mint, although this has been a jealously guarded government privilege historically. Money changing of various kinds is also a key business of banks - either in foreign exchange or with domestic currencies.

As part of their business, most banks will take in money from other people and trade and invest it on their behalf, returning a portion of the profits from that trade (known as investment banking). The modern phenomenon of retail banking (acting as a day to day custodian of the majority of the funds of an average citizen and - in theory at least - keeping those funds safe and ready for him to access at need) has footprints several centuries old, but only became mainstream in the C20. Those aspects of banking which deal solely with the affairs of other businesses are known as merchant banking.

Arguably the bank has its roots in the private moneylender - providing loans from his own capital for his own profit (and usually engaging in money changing as well). It was not unknown for such individuals to trade with other people's capital as well, and such were the roots of investment banking. Extended families and groups of individuals were also known to syndicate and share risks for larger ventures - the Medici, the Fuggers and the Hanse were all in this category - and some large organisations, including religious ones such as the Knights Templar were known to engage in banking as well. These were mainly in the merchant banking business - and occasionally the provision of letters of credit for high net worth individuals - and until the early modern era, personal banking was very much the preserve of the moneylender for most people.

One who engages in banking as a profession is known (at least in polite circles) as a banker.

Where a large corporation or similar organisation operates something like a bank for its own internal purposes this is generally known as a treasury department. Such a department might well even issue a company scrip under the right circumstances. The difference between a company treasury and a government treasury may, in some times and places, be merely one of semantics.

The word "bank" may also refer to a building serving as the branch office of a banking company - albiet usually only in eras where retail banking is (getting) underway. These, and the money moving to and from them, are popular targets for criminals. That said, such places are popularly misunderstood as money repositories - even by people who should know better. Whilst there is, in most economies, a significant amount of cash on site, the idea that the majority of the money deposited with a bank is somehow sat about in the vaults grossly misunderstands how banking works. Anyone robbing a bank trying to get their hands on the money that has been invested there is liable to be sadly disappointed.

Culturally banking has many peculiar aspects and is often the subject of religious or other cultural taboos - the Mosaic Law places significant restrictions on lending for profit, as do various Christian denominations, whilst other Christian denominations (and Islam) forbid it completely. Bankers are also frequently targets of hostility from either or both of their creditors, or those whose money they have invested and lost. For those whose understanding of money is limited to it being solely representative, and especially those who believe in a system of fixed value, the idea of being able to rent out money is confusing and threatening. Regardless, historically a healthy banking industry appears to be a crucial component in sucessful trade - the Hanse being a key driver of economic growth in Northern Europe during the late middle ages, the Medici, Fuggers and others taking on similar role in the Renaissance and Early Modern period and the banking and insurance concerns of the city of London driving British dominance in the Colonial Era.


1. full source reference

Game and Story Use

  • Banks operating mints and issuing currencies doesn't take much deviation from historical events - for much of the C19 and early C20 it was normal for private banks to issue backed or semi-backed paper money, so issuing a true fiat currency wouldn't be too much of a stretch and neither would it be for a colonial bank or the treasury of a large multi-national (such as the Templars or the HEIC) to operate its own mint … under crown licence or not as appropriate.
  • PCs may wish to undertake - or foil - a "bank job" … whether physical or electronic.
  • Banks may also hire PCs as additional security, crime investigators or general intelligence agents … or potentially as a "red team" to test security arrangements for hire.
  • PCs may also wish to invest their adventuring profits somewhere - depending on the era, putting them in a bank may be akin to gambling or the "easy" option.
    • Even funnier if they somehow end up stealing their own money.
  • The bank as depository might be an actual thing in some settings - granted there are real banks (and other organisations) that offer safe storage of valuables, but this is paid for storage, not an investment in the bank, but a setting where laws against interest are present and enforced might well see storage banks predominating.
  • The "where is all the money?" thing could be played straight - a robber with no understanding of banking could well assume that he is being lied to when the manager cannot produce "all that money them rich folks has stashed away in here" … and that could turn nasty very quickly.
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