161 Fun Facts About Banking

Which Restoration king's 1672 'Stop of the Exchequer' ruined many London goldsmith-bankers?

Charles II shut the Exchequer in January 1672, freezing more than £1 million owed to goldsmith-bankers; Edward Backwell, banker to Samuel Pepys and to the king himself, was owed nearly £300,000 and gave up banking.

What is the oldest existing retail bank in the world?

Banca Monte dei Paschi di Siena began in 1472 as a civic pawn bank, set up by Siena's magistrates to lend to the city's poor at low interest, and is widely cited as the world's oldest surviving bank.

Which religious order championed the monti di pietà, charity pawn banks that spread across fifteenth-century Italy?

The Franciscans preached against moneylenders' steep rates and raised the funds for monti di pietà, starting in Umbrian towns such as Perugia in the 1460s, so the poor could pawn goods for cheap loans.

Which Hamburg house, founded by brothers in 1590, is Germany's oldest private bank?

Berenberg began in Hamburg in 1590 not as a bank but as the cloth-trading business of brothers Hans and Paul Berenberg; financing other merchants grew out of the trade, and the house has operated ever since.

Which ancient lawgiver's code let a farmer skip a year's loan repayment if storm or drought ruined the harvest?

Hammurabi, king of Babylon, had it carved in stone: a debtor whose crop failed could 'wash his debt-tablet in water' and owe no grain that year, one of many rules his code set for loans, interest and deposits.

Which medieval military order issued letters of credit to pilgrims travelling to the Holy Land?

The Knights Templar let a pilgrim leave money at one of their houses in Europe, such as London's Temple Church, and collect it in Jerusalem against a letter of credit, so there was no cash to steal on the road.

Which English king's unpaid war loans are traditionally blamed for ruining Florence's Bardi and Peruzzi banks in the 1340s?

Edward III borrowed heavily from the Bardi and Peruzzi to fight the Hundred Years' War and never repaid in full; historians now add that costly ventures at home, including Florence's war with Lucca, also sank them.

Who founded the famous Florentine bank of 1397?

Giovanni di Bicci de' Medici founded the Medici Bank in Florence in 1397; his son Cosimo took it over on Giovanni's death in 1429.

Which accounting method is the Medici Bank often credited with refining?

Double-entry bookkeeping was not a Medici invention: Florentine merchants such as the Farolfi firm were keeping full debit-and-credit ledgers around 1300, almost a century before the bank opened in 1397.

Which two great banking families emerged in southern Germany in the 15th century?

The Fuggers and the Welsers, both merchant houses of Augsburg, rose in the fifteenth century; Jakob Fugger bankrolled the Habsburg emperors, and the Welsers were granted Venezuela by Charles V in 1528.

What did seventeenth-century London goldsmiths issue in exchange for deposits of precious metal?

Goldsmiths' receipts certifying quantity and purity of the metal they held grew over time into notes payable on demand, the ancestors of the English banknote.

Which trading company borrowed heavily from the Bank of Amsterdam, breaking its rule of holding coin for every deposit?

The Dutch East India Company was lent money again and again despite the rule that every deposit stayed in the vaults; when the bank's true state emerged in the 1790s, confidence in it collapsed and never returned.

Which central bank, older than England's, is the world's oldest still operating?

Sveriges Riksbank rose in 1668 from the ruins of a failed private bank; this time parliament's estates, not a banker licensed by the king, were put in charge, and it has run without a break ever since.

Which private Swedish bank issued Europe's first banknotes in 1661, then collapsed after printing too many?

Stockholms Banco, Johan Palmstruch's bank, printed far more notes than its coin could cover and stopped paying out in 1664; Palmstruch was sentenced to death for mismanagement in 1668, then reprieved.

The Bank of England was founded to fund a war against which country?

France was the enemy: William III needed £1.2 million for the Nine Years' War, and the subscribers who lent it were rewarded with a charter as the Governor and Company of the Bank of England.

William Paterson, the merchant who proposed the Bank of England in 1691, came from which country?

Scotland's William Paterson, a Dumfriesshire farmer's son, saw his plan become the Bank of England in 1694, fell out with his fellow directors within a year, and went home to promote the disastrous Darien colony.

What is the Bank of England's nickname?

The Old Lady of Threadneedle Street comes from James Gillray's 1797 cartoon, drawn after the Bank was ordered to stop paying out gold: it shows Pitt the Younger wooing an old lady, the Bank, to get at her gold.

Whose government nationalised the Bank of England in 1946?

Clement Attlee's government took the Bank of England into public ownership on 1 March 1946, ending 252 years in private hands and giving ministers the power to appoint its governors and issue it directions.

To which country did the Bank of England secretly ship its gold for safekeeping in 1940?

Canada's central bank hid the gold in its Ottawa vaults after Operation Fish carried it across an Atlantic hunted by U-boats; not one gold-bearing ship was lost.

Which bank is Scotland's oldest?

Bank of Scotland was founded in 1695, a year after its London counterpart, which had been created to lend to the crown for a war; the Scottish bank's founding act instead forbade it to lend to the king without parliament's consent.

Which bank invented the overdraft in 1728 for an Edinburgh merchant?

Royal Bank of Scotland was only a year old in May 1728 when it agreed that merchant William Hog could overdraw whenever bills fell due before his own payments arrived; this 'cash credit' was the forerunner of the overdraft.

Which word for financial ruin comes from Italian words for a money-changer's 'broken counter'?

Bankrupt comes from the Italian banca rotta, 'broken counter', said to recall the custom of smashing the trading table of a money-changer who could not pay his debts.

The person who writes a cheque is known as what?

The drawer writes and signs the cheque, which is legally an order telling the drawee, the bank, to pay the payee; if the drawer's account is short, the bank can refuse and the cheque bounces.

Where was the world's first ATM installed, on 27 June 1967?

Barclays Bank in Enfield, north London, had TV comedy star Reg Varney make the first withdrawal; the machine took a special paper cheque marked with mildly radioactive carbon-14, not a card.

ATM pioneer John Shepherd-Barron cut his planned six-digit PIN to four after testing it on whom?

His wife Caroline told him over the kitchen table that four figures were the most she could remember, so his plan for a six-digit code, like his old army number, was dropped and four became the world standard.

Which name for an ATM is standard in Canada's financial industry?

An automated banking machine (ABM) is the Canadian industry's term, used by the Canadian Bankers Association, though plenty of Canadians and Canadian firms simply say ATM.

What are cash machines not operated by a financial institution called?

White-label ATMs carry no bank's name: private businesses run them in shops, bars and petrol stations and live on a convenience fee charged on every withdrawal, part of which goes to the premises' owner.

Which reserve system lets a bank lend out most of the money its customers deposit?

Fractional-reserve banking is the system most countries have institutionalised; the alternative, full-reserve banking, is hypothetical.

Which international standards set banks' minimum capital requirements?

The Basel Accords set minimum capital ratios for banks, such as 8% of risk-weighted assets, yet they are not law: the committee's decisions bind no one until each country writes them into its own rules.

Which country's three biggest banks all collapsed within a week in 2008?

Iceland's Kaupthing, Landsbanki and Glitnir had grown too big for the state to rescue, so it let them fail and later jailed many of their senior executives.

In Disney's Mary Poppins, what does young Michael Banks demand back, setting off a run on his father's bank?

His tuppence was meant to feed the birds, but the bank's elderly chairman snatches it to invest; when Michael shouts for his money, other customers panic and demand theirs too.

Which former Fed chair shared the 2022 economics Nobel with Douglas Diamond and Philip Dybvig for research on banks and financial crises?

Ben Bernanke won for showing how bank runs turned a downturn into the Great Depression; Diamond and Dybvig were honoured for their 1983 model of why a mere rumour can bring a bank down.

Which bank collapsed in March 2023 after customers pulled $42 billion in a single day?

Silicon Valley Bank lost $42 billion of deposits on 9 March 2023 as its venture-capital customers urged one another online to get out; regulators seized it the next morning.

Which classic 1946 film depicts a run on a small-town building and loan?

It's a Wonderful Life has George Bailey give up his honeymoon and hand out the couple's own honeymoon money to calm the depositors crowding his Building and Loan.

Which investor 'broke the Bank of England' by betting against the pound in 1992?

George Soros's fund sold billions of pounds it had borrowed; on Black Wednesday the government announced two interest-rate rises in a single day, then gave up and pulled sterling out of Europe's exchange-rate mechanism.

Which president signed the Federal Reserve Act into law?

Woodrow Wilson signed the Federal Reserve Act two days before Christmas 1913, having insisted that a board of presidential appointees in Washington, not bankers alone, oversee the regional banks.

Which city headquarters the Fed's twelfth, westernmost district?

San Francisco was chosen in 1914 after hearings in western cities including Los Angeles and Seattle; both of those ended up as branch offices of its bank, which serves the Fed's largest district.

What are the two parts of the Fed's 'dual mandate'?

The dual mandate, set in the 1977 Federal Reserve Reform Act, is maximum employment and stable prices; moderate long-term interest rates is a third, less-cited goal.

Which Fed body sets monetary policy by adjusting the funds-rate target?

The Federal Open Market Committee, the Fed's governors plus a rotating set of Reserve Bank presidents, sets only a target: the funds rate itself is what banks charge each other overnight, which the Fed then steers toward that number.

Where in Georgia did Senator Aldrich secretly meet financiers to draft the Fed plan?

Jekyll Island's exclusive club hosted Senator Nelson Aldrich and a handful of financiers in November 1910; they travelled in a private rail car posing as duck hunters and used first names only.

What is the name of the Fed's published survey of business conditions in its twelve districts?

The Beige Book began in 1970 as the Red Book, a confidential briefing for policymakers; when it went public in 1983 the cover changed colour, and it now appears eight times a year.

Which Federal Reserve Bank is custodian of the world's largest gold storage reserve?

New York's Fed held more than 6,000 tonnes of gold in 2024 in a vault 80 feet below street level, yet owns none of it: the bars belong to governments, central banks and international bodies.

Who set up the First Bank of the United States in the 1790s?

Alexander Hamilton, the first Treasury Secretary, won a charter for the First Bank of the United States in 1791 over the objections of Jefferson and Madison.

Which president vetoed the recharter of the Second Bank of the United States in the 'Bank War'?

Andrew Jackson vetoed the recharter bill in July 1832 and won re-election over Henry Clay that autumn, then withdrew federal deposits from Nicholas Biddle's bank.

In which city was the Second Bank of the United States located?

Philadelphia housed the Second Bank in a Greek temple of a building that William Strickland modelled on the Parthenon; after the bank's demise in 1836 it changed hands and later became the city's custom house.

Which Act created the FDIC?

The Banking Act of 1933, better known as Glass–Steagall, created the FDIC after thousands of US banks had failed in three years; deposit insurance was the most fiercely contested clause in the whole act.

What FDIC insurance limit per ownership category did Dodd–Frank set in 2010?

The FDIC's $250,000 limit began as a temporary 2008 crisis measure until Dodd–Frank made it permanent in 2010.

Which president signed the FDIC into law?

Franklin D. Roosevelt feared insurance would reward badly run banks and threatened a veto, but signed it anyway; coverage began at just $2,500 per depositor.

What is the FDIC's primary source of funding?

Insurance dues from member banks fund the FDIC, which receives no appropriations from Congress, though the full faith and credit of the US government stands behind its guarantee.

What did the Glass–Steagall provisions of 1933 separate?

Commercial and investment banking were split because Congress feared deposits were feeding stock speculation after the 1929 crash; firms were given a year to choose one business or the other.

Which 1999 law repealed Glass–Steagall's affiliation restrictions?

The Gramm–Leach–Bliley Act, signed by Bill Clinton in November 1999, let banks, brokers and insurers share one roof, making legal the Citicorp–Travelers merger that had created Citigroup a year earlier.

Which investment bank did JPMorgan Chase rescue for $10 a share in March 2008?

Bear Stearns, facing a run on its funding, was sold to JPMorgan Chase in a Fed-backed deal announced on 16 March 2008 at $2 a share, raised to $10 a week later.

Which Japanese firm bought Lehman's Asia-Pacific franchise after the collapse?

Nomura bought Lehman's Asia-Pacific franchise, then its European and Middle Eastern equities and investment-banking arms, in September 2008; Barclays took the North American business.

Which merchant house collapsed in 1995 after losses of £827 million by trader Nick Leeson?

Barings, the UK's oldest merchant bank, fell in February 1995 after Nick Leeson hid losses that reached £827 million in a secret error account numbered 88888.

For how much did Dutch bank ING buy the collapsed merchant house after Leeson's losses?

£1 was a nominal sum: in buying the collapsed house in 1995, ING also took on all of its liabilities, so the real price was the debts it inherited.

Which US land purchase did the Baring family's London bank help finance?

The Louisiana Purchase of 1803 was paid for in US bonds; because Napoleon wanted his money at once, Barings and Hope & Co. of Amsterdam bought the bonds and paid him in cash, a deal that roughly doubled US territory.

Which natural disaster upset markets and wrecked Nick Leeson's Nikkei bets?

The Kobe earthquake of 17 January 1995 sent the Nikkei sharply lower; Leeson had sold straddles and then bought futures betting on a quick rebound, and the losses became unrecoverable.

Who played Nick Leeson in the 1999 film Rogue Trader?

Ewan McGregor played Nick Leeson in Rogue Trader, based on the memoir Leeson wrote after his conviction; David Frost optioned the story after interviewing him behind bars.

Where did Nick Leeson serve his sentence?

Changi Prison, Singapore held Nick Leeson after a court there gave him six and a half years for fraud; he was diagnosed with colon cancer inside and was freed in 1999, before his term was up.

Which company bought Northern Rock's branches in 2012?

Virgin Money paid £747 million up front for the nationalised Northern Rock, a bank it had tried and failed to buy before the 2008 state takeover; taxpayers were left with a paper loss.

In which city was Northern Rock, the bank hit by a run on its branches in 2007, based?

Newcastle upon Tyne was home to Northern Rock, which funded its mortgages by borrowing on the money markets; when the 2007 credit crunch cut that off, savers queued to withdraw their money.

Which president signed the 1989 law that bailed out America's failed savings and loans?

George H. W. Bush signed the rescue in August 1989, months into his term; it set up an agency to sell off failed thrifts, after about a third of US savings and loans went under between 1986 and 1995.

Whose Lincoln Savings and Loan failed in 1989, tarnishing five US senators?

Charles Keating's Lincoln Savings and Loan cost taxpayers about $3 billion and left thousands of customers holding worthless bonds; the senators, John McCain and John Glenn among them, became the Keating Five.

Which bank was the world's largest lender by total assets in 2024?

Industrial and Commercial Bank of China, created in 1984 to take over the People's Bank of China's commercial business, was the world's largest bank by total assets in 2024, with more than $6 trillion.

Which US bank was the world's most valuable lender by market capitalisation in 2024?

JPMorgan Chase ended 2024 worth about $680 billion, more than any other bank; it had grown partly by absorbing failed rivals, Washington Mutual in 2008 and First Republic in 2023.

Which founding father established the Bank of the Manhattan Company in 1799?

Aaron Burr won a 1799 charter for the Manhattan Company to pipe clean water into the city, then used a clause letting it invest spare capital to open the Bank of the Manhattan Company.

Which financier locked bankers in his library overnight until they funded a rescue?

J. P. Morgan pocketed the key and held the trust-company presidents until, before dawn, they pledged $25 million; alarm that so much had hung on one private banker helped lead to the Federal Reserve six years later.

In which city is Bank of America's corporate headquarters?

Charlotte, North Carolina is home because today's Bank of America grew out of a North Carolina lender that bought the Californian original and kept its own headquarters, taking only the famous name.

Under what name did Amadeo Giannini found the San Francisco lender that grew into BofA, in 1904?

Amadeo Giannini founded the Bank of Italy in San Francisco in 1904 to serve Italian immigrants; it became Bank of America in 1930 after merging with Bank of America, Los Angeles.

What is BankAmericard, the credit card Bank of America launched in 1958, called today?

Visa began as BankAmericard, which Bank of America launched in 1958 by mailing tens of thousands of unsolicited cards to residents of Fresno, California; the name changed in the 1970s.

Which two banks merged in 1998 to create the first US bank with branches from coast to coast?

NationsBank and BankAmerica combined in a deal worth about $62 billion; the buyer, NationsBank, then dropped its own name and traded under its Californian partner's older one, Bank of America.

In which city was HSBC established in 1865?

Hong Kong is where HSBC opened in March 1865, set up by merchants who wanted a locally run bank to finance trade with China and Japan; its Shanghai office followed a month later.

Which British lender did HSBC take over in 1992?

Midland Bank, one of Britain's big four, gave HSBC the European foothold it wanted in 1992; the Midland name vanished from high streets by 1999, replaced by HSBC's own.

HSBC's Scottish founder, Thomas Sutherland, was a manager for which British shipping line?

P&O had sent Thomas Sutherland east to run its Asian operations; seeing that merchants there lacked a local bank, he drew up a prospectus for one, and the port's biggest firms backed it.

Which man founded his eponymous Wall Street firm in a one-room basement office in 1869?

Marcus Goldman opened his one-room basement office on Pine Street in 1869, next to a coal chute, trading commercial paper; his son-in-law Samuel Sachs joined in 1882.

In which German city was Deutsche Bank founded in 1870?

Berlin was Deutsche Bank's first home: it was set up there in 1870 so that German exporters need no longer rely on British and French banks, and it moved its head office west only after the Second World War.

Which two men founded the express-and-banking company that served gold-rush California in 1852?

Henry Wells and William Fargo founded Wells, Fargo & Co. in 1852 to carry gold and run banking in California; they had already founded American Express in 1850.

Which Pittsburgh banker served as US Treasury Secretary under Harding, Coolidge and Hoover?

Andrew Mellon, whose family bank became Mellon Bank, served as Treasury Secretary from 1921 to 1932 under Harding, Coolidge and Hoover, cutting top income-tax rates sharply.

The Rothschild banking dynasty rose from which German city?

The Rothschilds rose from the Judengasse ghetto in Frankfurt, where Mayer Amschel Rothschild built his business in the 1760s; the name comes from the family's 'red shield' house sign.

What do the five arrows on the Rothschild coat of arms represent?

Five sons of Mayer Amschel Rothschild ran the family's banks in five European cities; the family's archive pairs the arrows with an old tale of a father showing his sons that a bundle will not snap like a single shaft.

By legend, news of which battle reached banker Nathan Rothschild before it reached the British government?

Waterloo is the battle in the tale, which an 1846 pamphlet spun into a claim that he made a fortune from the news; historians have found the pamphlet's story was made up.

In 1875 the Rothschilds lent Britain £4 million at short notice to buy a stake in what?

The Suez Canal shares belonged to Egypt's ruler, who had to sell to pay his debts; Disraeli borrowed the £4 million from Lionel de Rothschild and made Britain the canal's largest single shareholder.

At which 1944 conference were the World Bank and IMF established?

Bretton Woods, a New Hampshire resort, hosted delegates from 44 nations; Keynes's plan for a new world currency, the bancor, lost out to a US design that tied currencies to the dollar.

Where is the World Bank headquartered?

The World Bank sits in Washington, D.C., and is really a family of five organisations rather than a single bank.

By tradition, the president of the World Bank is of which nationality?

American by an unwritten deal as old as the bank: the United States, its largest shareholder, nominates the World Bank's president, and in return Europeans pick the head of the IMF.

Which body, created to handle German war reparations, now acts as a bank for central banks?

The Bank for International Settlements opened in 1930 and is the oldest international financial institution; the Allies voted in 1944 to abolish it, but central bankers lobbied and the plan was dropped by 1948.

Who was the first president of the European Central Bank?

Wim Duisenberg, a Dutch central banker, led the ECB through the euro's launch; one government had pushed its own man, Jean-Claude Trichet, and under a reported compromise he stepped down for him in late 2003, before his term ended.

Which country joined the euro in 2001 as its twelfth member, two years after the launch?

Greece missed the 1999 launch because it did not yet meet the entry tests; it qualified in 2000 and joined on 1 January 2001, a year before euro notes and coins arrived.

Islamic banking is built around a ban on what practice, known as riba?

Charging interest is avoided because money should not simply earn money; Islamic banks instead share profit and risk with customers, or buy an asset and resell it at an agreed mark-up.

Which central bank, set up in 1882, was modelled on Belgium's?

The Bank of Japan was finance minister Matsukata Masayoshi's answer to paper money that had lost its value after years of unbacked notes; its designers judged Belgium's young central bank among the best-designed in Europe.

Which 19th-century writer's book Lombard Street urged central banks to be lenders of last resort?

Walter Bagehot, editor of The Economist, wrote Lombard Street in 1873 with the Overend Gurney collapse fresh in mind, arguing that in a panic the Bank of England should lend freely at very high rates.

Where did police catch Swiss bankers in 1932 helping bishops and generals dodge tax?

Paris police seized a list of thousands of French clients, and frightened depositors pulled their money out; two years after the scandal, Switzerland made it a crime for a banker to reveal a client's details.

What began in Switzerland in 2017 that effectively ended banking secrecy for foreign clients?

Automatic exchange of tax information means Swiss banks now report foreign clients' accounts to their home tax authorities every year; secrecy still applies to customers who live in Switzerland.

What did banks mainly use to send international payment instructions before SWIFT went live in 1977?

Telex carried banks' payment instructions before SWIFT; every free-format message had to be written out, keyed in and read by hand, so the banks built a shared standardised network to replace it.

Which country's banks were cut off from the SWIFT payments network in 2012 over its nuclear programme?

Iran's banks were disconnected in March 2012 to enforce EU sanctions, a step SWIFT's own chief called extraordinary and unprecedented; most were let back in after the 2015 nuclear deal.

What do the first two letters of an IBAN identify?

The country comes first as a two-letter code, followed by two check digits that let software catch a mistyped number before any money moves, then up to 30 characters of local account number.

On which Indonesian island did the Majapahit kingdom make boar-shaped terracotta money boxes?

Java's Trowulan, thought to be the Majapahit capital, has yielded many of them; the Indonesian word for any money box is still celengan, literally 'boar-like', from celeng, a wild boar.

What do collectors call a piggy-style coin box, as opposed to a 'mechanical' one?

A still bank has no moving parts, unlike the cast-iron mechanical banks of the 19th century, whose figures performed a trick with each coin to coax children into saving.

Why is a UK public holiday called a 'bank holiday'?

Banks traditionally close on those days: an 1871 Act pushed through by the banker and MP John Lubbock named the days when they could shut, and the public nicknamed them St Lubbock's Days.

Which UK credit card, launched in 1972 by a consortium of banks, rivalled Barclaycard?

Access, later sold as 'your flexible friend', was launched in 1972 by rival high-street banks to break Barclaycard's six-year hold on British credit cards.

Which German mayor, whose name cooperative banks across central Europe still carry, founded the first rural credit union in 1864?

Friedrich Wilhelm Raiffeisen was a young mayor in the hungry winter of 1846–47, when he handed out grain on credit; convinced that self-help beat charity, he turned his welfare society into a loan cooperative in 1864.

Alphonse Desjardins opened North America's first credit union in 1901 in which province or state?

Quebec's town of Lévis was home to Desjardins, a parliamentary stenographer alarmed by usury; after three years studying Europe's credit cooperatives he founded his caisse populaire there in December 1900.

Which bank robber reportedly explained the choice of target by saying 'Because that's where the money is'?

Willie Sutton (1901–1980), who stole an estimated $2 million over a 40-year career, denied the quote in his memoir, but 'Sutton's law' keeps it attached to his name.

Which Depression-era outlaw's gang copied the 'Lamm technique' of casing banks and mapping getaways?

John Dillinger's gang borrowed the methods of Herman Lamm, a German ex-soldier who studied each bank in advance and planned his escape routes; Lamm himself died after a botched Indiana robbery in 1930.

Which kidnapped heiress was photographed helping her captors rob a San Francisco bank in 1974?

Patty Hearst, a newspaper heiress, was caught on the bank's cameras weeks after her abduction; convicted of the robbery, she was freed after nearly two years when Jimmy Carter commuted her sentence.

A US safe-maker advertised that its bank vaults had survived which 1945 event?

The atomic bombing of Hiroshima did not destroy the Mosler vaults installed in a bank there before the war, and the Ohio company made their survival a centrepiece of its marketing.

What does a bank vault's time lock do?

Prevents opening until set hours have passed, even for someone who knows the combination: the time lock was devised so that robbers gained nothing by kidnapping a banker and forcing the numbers out of him.

Which country issued the first banknote printed on modern polymer film, to mark its bicentenary in 1988?

Australia's $10 bicentenary note was developed by its central bank with the national science agency CSIRO; by 1996 every Australian note was plastic, a world first.

In law, what is a customer's demand deposit balance?

A debt the bank owes the customer: money paid in becomes the bank's own to use as it pleases, and it simply owes the sum back on demand, a rule the House of Lords confirmed in Foley v Hill in 1848.

Which city's council founded the Taula de Canvi, a public bank often called Europe's first, in 1401?

Barcelona's Consell de Cent opened the Taula de Canvi in the city's merchant exchange on a table draped with the city's arms, a sign that the city itself stood behind every deposit; it lasted, much reduced, into the nineteenth century.

Which US agency, rather than the Federal Reserve, charters and supervises national banks?

The Comptroller of the Currency dates from 1863, when Lincoln signed a law creating national banks and a single national currency to replace the jumble of notes issued by state banks.

What do the letters NSF stand for when a bank returns a bounced check to the person who paid it in?

Non-sufficient funds is the most common reason a bank refuses to honour a check, and the result goes by nicknames such as a rubber check, a cold check or a hot check.

Which payments network, launched in 2017, is owned by a group of America's biggest banks?

Zelle grew out of clearXchange, a service that three large banks started in 2011, and its owners include Truist, Capital One and PNC Bank.

Which guaranteed payment is drawn on a bank's own money and signed by a bank employee?

Cashier's check payments are trusted for large sales because the bank itself, not the buyer, stands behind the money; in Canada the same product is called a bank draft.

What is the act of signing the back of a paper check before cashing it properly called?

Endorsing a check with nothing but a signature makes it payable to the bearer, so anyone who gets hold of it can try to cash it.

Which payroll method sends wages electronically into a bank account instead of issuing a paycheck?

Direct deposit became the norm for government payments too: a 1996 US law required federal agencies to make electronic payment available by 1999.

Which prepaid paper payment, a directive to pay a set sum, is considered more trusted than a personal check?

Money order services were run by private firms in Britain before 1838, when the state mail service noticed how profitable the business had become and took it over.

Which banking app feature lets a customer pay in a paper check using only a smartphone?

Mobile deposit began as a service for businesses, which needed dedicated check scanners costing up to $2,500 before smartphones brought it to ordinary customers.

Which piece of plastic pays for shopping straight from a checking balance, not with borrowed money?

Debit card payments need the money to be in the bank at the moment of sale, which is why the product was also sold under the name check card.

Which arrangement, popular with married couples, lets two or more people own the same checking balance?

Joint account holders in the US often choose a survivorship version to avoid probate, since ownership then goes straight to the surviving holder.

Which instruction tells a bank to refuse a check that its customer has already written?

A stop payment usually costs about the same as a bounced-check fee, yet it carries less of a dishonorable look than letting the check bounce.

What name do British banks give the everyday product that Americans know simply as checking?

Current account is the usual term in countries with a British banking heritage, while North American credit unions call their version a share draft.

What term do FDIC surveys use for households in which nobody holds a checking or savings account?

Unbanked households made up 4.2 percent of the US total in the FDIC's 2023 survey, about 5.6 million homes that may lean on alternative financial services instead.

What is the term for a branchless, app-only bank that often relies on a partner bank's license?

Neobank brands operate entirely online, and unlike older branchless banks many of them hold no banking license of their own and lean on partner banks instead.

After 9/11 grounded check-carrying planes, what did the Check 21 Act let banks exchange instead of paper?

Digital images took the place of the paper originals, and where paper is needed a bank can print a photo-reduced copy known as a substitute check.

What is the term for money briefly counted twice in the banking system while a check clears?

Float tends to run high on Tuesdays, when a weekend backlog of checks is working through the system, and even bad weather can push it up.

What is a US check called once more than six months have passed since the date written on it?

Stale-dated status arrives after about six months in the US and Canada, whereas an Australian check typically stays valid for fifteen months.

Which company launched a large-scale traveler's check system in 1891 to replace letters of credit?

American Express's traveler's check is traditionally credited to employee Marcellus Flemming Berry, after the company's president struggled to obtain cash in smaller European cities.

Which US payment network, governed by the nonprofit Nacha, moves payroll and tax refunds between banks?

Automated Clearing House traffic reached 23 billion transactions worth $51.2 trillion in 2018, all of it bundled into batches rather than sent one payment at a time.

Which consumer reporting agency do most US banks consult before letting a new customer open a deposit account?

ChexSystems reports cover data that banks submitted over the past five years, and about eighty percent of US commercial banks and credit unions use them to screen applicants.

Which investment banking term for guaranteeing a securities sale originated in the Lloyd's of London insurance market?

Underwriting began with sea voyages: backers who accepted part of the risk of shipwreck for a premium literally wrote their names under the details on a Lloyd's slip.

Which technology company sold its shares through a Dutch auction when it went public in 2004?

Google ranks among the largest auction IPOs ever held, alongside Japan Tobacco and Singapore Telecom, though the method never proved popular with issuers.

What is the traditional name for the information barrier between an investment bank's dealmakers and its analysts?

A Chinese wall became a popular term in the US after the 1929 stock market crash, when the government legislated a separation between investment bankers and brokerage firms.

What nickname does a preliminary IPO prospectus earn from the bold disclaimer printed on its front page?

Red herring documents leave out the final price and the number of securities on offer, so investors may not place buy orders on the strength of one alone.

Which tobacco and food giant did KKR buy in 1988 in what was then the largest leveraged buyout in history?

RJR Nabisco's takeover was widely seen at the time as the leading example of corporate greed and inspired the book Barbarians at the Gate, later an HBO television movie.

Which Drexel Burnham Lambert financier was nicknamed the Junk Bond King before pleading guilty to securities violations?

Michael Milken was paid more than $1 billion over four years while running the firm's high-yield bond department, a record for US income at that time.

Which 1989 Wall Street memoir recounts its author's years as a bond salesman at Salomon Brothers?

Liar's Poker follows its author from his hiring in 1984 through his training, and he quit the firm at the start of 1988 to write it and become a financial journalist.

Which over-allotment option, named after a company now called Stride Rite, lets an IPO's banks buy 15% more shares?

Greenshoe takes its name from Green Shoe Manufacturing, the first firm to permit the practice, and it lets banks support the share price after a listing without risking their own capital.

What name for the world's largest investment banks comes from their top billing on deal notices called tombstones?

Bulge bracket status rests mainly on a firm's financial advisory business rather than on its sales and trading desks.

What do savers call earning a return on past returns, a practice Roman law condemned when lenders charged it?

Compounding found its landmark text in 1613, when Richard Witt published Arithmeticall Questions, long after lenders who charged it were accused of the worst kind of usury.

Which savings product locks money away for a fixed term and charges a penalty for early withdrawal?

Certificate of deposit holders are expected to wait until maturity to collect, and although most are paid a fixed rate, some institutions sell versions with variable rates.

Which economic force makes a savings balance lose buying power when it outruns the rate a bank pays?

Inflation means each unit of currency buys fewer goods and services, so a balance that earns less than the rise in prices shrinks in real terms.

Which small paper book did tellers once update by hand to record every transaction on a savings account?

A passbook let customers hold their transaction records in their own hands for the first time when the booklets appeared in the 18th century.

Which three-letter figure must US banks quote by law so that shoppers can compare savings accounts fairly?

APY, short for annual percentage yield, must be disclosed clearly and uniformly under a law passed in 1991 so that savers can make a meaningful comparison between accounts.

Which mental shortcut estimates how long savings take to double by dividing a number by the yearly rate of return?

The rule of 72 appears as early as 1494 in Luca Pacioli's Summa de arithmetica, which presents it without deriving or explaining it.

Which arm of the US government ran its own savings system for the public from 1911 until 1967?

The Post Office paid savers 2% by law, deliberately below the 3.5% that banks offered in 1910, so that the scheme would not compete with them.

Which seasonal savings account did Merkel Landis of Pennsylvania's Carlisle Trust Company introduce in 1909?

The Christmas club drew 350 customers in its first year; each put aside about $28 and was paid out on December 1, ready for the shopping season.

Which federal agency insures savings held at credit unions in the way the FDIC protects bank deposits?

The NCUA runs the Share Insurance Fund with the full faith and credit of the US government behind it, covering federal credit unions and most state-chartered ones.

Which Federal Reserve measure limited savers to six convenient withdrawals per statement period until 2020?

Regulation D lost the limit once reserve requirements fell to zero, a change the central bank said had made the line between checking and savings accounts unimportant.

Which everyday finance word comes from a medieval Law French term meaning 'death pledge'?

Mortgage refers to a pledge that 'dies' in one of two ways: when the debt is finally paid off, or when the property is taken through foreclosure.

What nickname is given to a lender who charges illegally high interest and collects with threats of violence?

Loan shark operations mostly run outside the law, so they cannot use the courts to collect their debts and fall back on blackmail and threats instead.

What is the term for property a borrower pledges to a lender, who can take it if the loan goes unpaid?

Collateral is not limited to homes and cars: stocks and bonds are also handed to financial institutions as marketable security in exchange for loans.

Which short-term, high-interest form of borrowing is designed to be repaid out of the borrower's next wages?

Payday loan use doubled personal bankruptcy rates in one 2019 study of the United States, which blamed the damage on households' worsened cash flow.

What is a person called who promises to take on a borrower's debt if that borrower defaults?

A guarantor is often a parent backing a young home buyer who has not saved a large deposit, and the promise can cover either a portion of the debt or all of it.

Which credit-scoring company, founded in 1956 by an engineer and a mathematician, takes its name from its two founders?

FICO is short for Fair Isaac Corporation, named for its founders Bill Fair, an engineer, and Earl Isaac, a mathematician, who started it as Fair, Isaac and Company.

What name is given to the benchmark that banks typically charge their most creditworthy borrowers?

The prime rate in the United States runs about three percentage points above the federal funds rate, and many variable-rate loans use it as their index.

Which Bangladeshi economist won the 2006 Nobel Peace Prize for pioneering microcredit through Grameen Bank?

Muhammad Yunus hit on the idea in 1976 in the village of Jobra, where he lent his own money to 42 women who had been relying on usurious lenders.

What is the process called by which regular payments gradually pay down a loan's principal over its life?

Amortization typically works through equal instalments, each one split between interest and principal, following a timetable drawn up in advance.

Which 1968 US law makes creditors disclose borrowing costs in a standard way so that consumers can shop around?

The Truth in Lending Act mostly leaves lenders free to set their own charges; what it demands is that the costs are presented in a uniform way.

Which symbol traditionally hangs from a bar above the door of a pawnbroker's shop?

Three golden balls may have started as flat yellow coins called bezants on a heraldic shield, later turned into spheres to better attract attention.

Which 2011 film follows a large Wall Street investment bank over 24 hours at the start of the 2008 financial crisis?

Margin Call was the directorial debut of J. C. Chandor, an investment banker's son, and it earned an Academy Award nomination for Best Original Screenplay.