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0 pointsFredPret3y ago0 comments

Banks are a massively significant cultural innovation. I can pay someone in a different country by pressing a button and it's a reliable, robust system.

In those days, it was a huge deal to be able to pay a merchant in France by giving gold, or even a paper representing ownership of gold, to a bank in England. Before, you had to send the money on a ship and hope for the best.

International banks led to a massive explosion in trade and global prosperity.

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dgb233y ago

Or is it advancements in communication technology that enables what you describe? What makes a bank an international bank?

FredPretOP3y ago

Not really. An international bank is one legal entity in two places. If you deposit 1 kg of gold in place A, your business partner can withdraw it in place B, minus fees of course. The bank still has to transfer the gold to make up the difference at a later date. The benefit is the merchants don’t have to do this themselves anymore.

Think of it as shipping-gold-as-a-service.

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dgb233y ago

Or is it advancements in communication technology that enables what you describe? What makes a bank an international bank?

FredPretOP3y ago

Think of it as shipping-gold-as-a-service.

j / k navigate · click thread line to collapse