that EXACT conversation happened with a friend of mine. he's trying to get a loan but his credit score is too high so he can't get one at any bank he's confused too,
@Atlas aït Amazal Banks benefit more if you delay the payment of the loan, I mean, if you don`t pay the loan the interest will raise. If you still can`t pay the loan, They will do an embargo!! I think that`s how the Bank System works,however, I am not an eXpert
It depends on the type of bank/financial institution and their actual intent in loaning the money, but this absolutely happens. A more obvious example is credit cards. The credit card companies won't offer more/better cards to people who pay in full right on time every time, because they don't generate any interest. However people who carry some balance on the card at all times, never paying it off completely nor maxing out the limit, get offered so many cards they're sick of hearing about new offers. If you generate interest, you're a desirable customer, but if you're bound to pay off early, you're not very profitable.
I'm surprised you didn't have an animation of the Templar's when you said "kings went after families" as homage to the French King destroying them because he didn't want to pay his loan back.
That's a simplification, it's the estates they owned without having to pay taxes on by decree of the old pope. One of the Louis puts in a French Pope who decides to go after them because they didn't want to merge with the other orders and be under the Pope (French) who was sequestered and subservient to the French king. To quote a modern poet, "It's not about the money, it's about the power"
“Families were often taken down by kings as quickly as the rose” And that’s when bankers quickly discovered mercenaries and paying off the kings court.
The king's court was paid BY THE KING. Also, how would the banks pay the mercenaries if they couldn't get money out of the people that they've lent money too. Not only that but the court could be itself in debt to that bank or banking family. The court itself could be pressuring the king to destroy a bank. In other words...you're wrong.
One series of novels that detailed how banks and bankers did business in medieval times was the Accursed Kings series by Maurice Druon. The books followed Robert of Artois, a French nobleman who had his inheritance stolen from him and plotted throughout the books to get back his birthright, meanwhile he was always short on money and would constantly borrow from his banker friend. That banker was an Italian Lombard living in France name Spinello Tolomei. Although Tolomei was a side character, whenever the books showed events from his perspective, it showed how Tolomei made his money, not only from lending to powerful lords and nobles but also how by doing so he would gain insider information on laws and policies that would then allow him to invest his bank's money to make profit. Through him and his nephew Guccio (who was also a prominent character in the books), we get a whole lot of insights into how banks took people's money and how they made profits from lending that money out and investing it in the 14th century.
Another is Dorothy Dunnett's "House of Niccolo" series. The central character starts his arc as a dyer's apprentice in Bruges, mixes with the Medicis and the power brokers of Venice, then starts his own medieval banking house. Transaction fees were another way these early banks got around the usury rules: I'm not charging you 10% annual interest on this loan -- but there is a 10% administrative fee on our one year notes.😏 Also, pawn brokers could pocket a sort of interest by charging more to redeem an item than they lent against it. A similar package of workarounds can be found in historical & modern Islamic banking, such as the practice of Wadiah.
@@robertmcgovern8850Adding fees to a loan might appear to be interest under another name, but that does avoid one matter that gets borrowers into trouble: compounding interest. That's where one borrows (say) $1000, only to find in 5 years, despite making regular payments, one now owes $2000: the borrower failed to repay enough to cover both the interest & pay down the principle. (Something modern US law requires banks to inform customers about, notwithstanding borrowers often fail to pay enough to cover both.)
When you take a loan you're supposed to multiply that money and share the profits with the bank by paying a little late or renewing the loan before it ends. If you pay early you're making them lose money, for them you basically run off with their money legally.
If you want to know what running a bank can do for your family, visit Florence. Or just visit it, it's an absolutely gorgeous place, even by Italian standards.
Well, they generally want some sort of reassurance that you're not just going to abscond with the money. If you have a significant source of legitimate wealth that's well known but illiquid, banks will gladly lend you the money because they know you're going to be able to pay it back, one way or another. If not in cash, then in the form of rights to that other source of wealth. It's certainly possible to get a loan for a small business from a bank, but you're generally need to have to personally guarantee the loan in case the business fails, and have some sort of skill that you can go back to being employed for to repay the loan. But if you have no established skill set, a bank is not going to risk the money on a new business venture unless they have solid collateral - like a house, which is why most bank loans ordinary people get are secured by the assets that the loan is used to purchase. There are lenders out there that aren't really banks (they don't take consumer deposits, they just have large-pocketed investors; this makes them subject to less government scrutiny since they're not holding on to money someone may need to survive) that will lend you money for your business without having any security, but because of the risk involved you will pay interest rates that are illegal for consumer loans, and then you still need to show that you have already been running the business a little while and have incoming cash you can pay them back with. The most notorious of these is On Deck. Whenever I see a client get a loan from them, I know it's basically the beginning of the end. It's like crack for businesses; the high of being flush with cash is gone in a few months as most of your free cash flow is tied up in repayments, and you have to go and get another hit, putting you deeper in the hole.
This puts the word “bank account” into a new light. You used to literally have a person “give an account” that you have dealings with a bank in order to confirm that those dealings are real and legitimate.
it just demonstrates how powerful families such as the Medicis must have been to keep up their operations for centuries without being shut down or forced out
I like how in the beginning the sign says "Банка" which means "jar" or a "pot", i guess thats because before if you wrote "Bank" for Google to translate it to Russian it will translate it to jar. It has been fixed now though.
"You can place your money, travel to the other side of the worls and retreive the money no problem." Tell that to Bank of America. I dont think they knew it was possible.
Even before the late middle ages, during the Crusades the Knights Templar became the first truly International bankers, pilgrims could deposit money with Templar houses in various European countries and receive a certificate of deposit that could be exchanged for cash as and when needed.The actual financial details were always in the Templar's own sophisticated code to ensure security.
@History Matters - TY. We've made good English subtitles for this video. YT have a new policy that only you can add subtitles. Therefore, please can they be added? Here they are: ------------------------------------------------------------ 0:00:00.080,0:00:06.680 In the modern world, you can enter a bank, deposit money, travel halfway across the planet, and retrieve that money, no issues. 0:00:06.680,0:00:10.820 But could you do this in the past and, with that, how did banks work back then? 0:00:10.820,0:00:14.200 Now, banking hasn't changed all too much throughout European history 0:00:14.200,0:00:19.080 and, as such, we're going to focus on the late Medieval, early Renaissance period for 2 main reasons: 0:00:19.080,0:00:23.540 1) Renaissance banks operated across borders in different states with different laws; 0:00:23.540,0:00:28.940 and 2) the Catholic Church expressly forbid the act of charging interest on loans, a practice known as 'usury', 0:00:28.940,0:00:30.560 which is what we'll begin with. 0:00:30.560,0:00:33.280 So, since a banker couldn't charge interest on a loan, 0:00:33.280,0:00:36.340 how did they make profit and why bother loaning money out at all? 0:00:36.340,0:00:41.880 Well, banking families like the Medicis weren't fools and they managed to get around interest in 2 ways. 0:00:41.880,0:00:46.660 The 1st was via late payment fines: whilst you couldn't charge interest at, say, 10%, 0:00:46.660,0:00:51.040 you could fine someone 10% of the total of the loan if they were late in their payments. 0:00:51.040,0:00:54.240 If you were to, say, pay back a loan on time you'd get no fines, 0:00:54.240,0:00:58.240 but in return, you'd likely be blacklisted by every banking family in existence. 0:00:58.240,0:01:02.040 And so, if you ever wanted another loan again, you'd need to pay it back late. 0:01:02.040,0:01:05.580 The 2nd way they got around interest was via currency conversion. 0:01:05.580,0:01:08.620 You'd get out a loan which would be provided in 1 currency, 0:01:08.620,0:01:13.700 and you'd then pay it back in a different currency at a different time and thus at a different exchange rate. 0:01:13.700,0:01:15.740 The bank would then pocket the difference. 0:01:15.740,0:01:21.760 The exception to these rules were Kings and the Pope, who just got the loan for free because 'please don't kill or excommunicate me'. 0:01:21.760,0:01:27.140 Now, as the process of taking out a loan suggests, you'd be taking out and paying back money in different places, 0:01:27.140,0:01:30.640 meaning that these banks had multiple branches, as the Medicis did. 0:01:30.640,0:01:34.860 So how did these banks confirm details and prevent fraud between the different branches? 0:01:34.860,0:01:38.980 Why couldn't someone simply forge a note saying that they have an account and then run off with the money? 0:01:38.980,0:01:42.220 Well, there were several checks and steps to verify information. 0:01:42.220,0:01:45.140 As many of you will know, banks at this time were run by families 0:01:45.140,0:01:48.380 and members of these families would be sent to the bank's branches to run them. 0:01:48.380,0:01:53.260 These branch managers would know each other quite well and importantly know each other's handwriting well too. 0:01:53.260,0:01:59.820 The bank would then use their own trusted messengers who would travel as fast as they could to the numerous branches to update them on account information. 0:01:59.820,0:02:04.320 Thus it was possible for a person to deposit money in, say, Florence and withdraw it in Paris, 0:02:04.320,0:02:05.400 for a fee, that is. 0:02:05.400,0:02:09.980 Now, all of this was very profitable, but this didn't stop most banks from going bust very quickly, 0:02:09.980,0:02:11.840 and this was mostly down to warfare. 0:02:11.840,0:02:17.680 Kings needed money for wars and having a branch in a Kingdom meant that you were obligated to lend money to the king if they needed it, 0:02:17.680,0:02:20.260 and this led to Kings taking advantage of banks. 0:02:20.260,0:02:25.220 Since they had near absolute authority, they could and did simply refuse to pay the loan back. 0:02:25.220,0:02:28.880 In fact, Kings were often pressured by their own merchants and Lords to do so, 0:02:28.880,0:02:33.780 since this would then force a bank to default and close, meaning that it couldn't collect payments from anyone else. 0:02:33.780,0:02:37.680 And so, that's an extremely simplified way of how medieval banking worked. 0:02:37.680,0:02:42.500 Despite the lack of modern technology or the ability to charge interest, banks were extremely profitable. 0:02:42.500,0:02:48.360 However, it was an extremely risky business too and families were often taken down by Kings as quickly as they rose up. 0:02:48.360,0:02:50.880 I hope you enjoyed this episode and thank you for watching. 0:02:50.880,0:02:52.400 With a special thanks to my patrons: 0:02:52.400,0:02:53.520 James Bissonette 0:02:53.520,0:02:54.360 Kelly Moneymaker 0:02:54.360,0:02:55.380 The Pastry Section 0:02:55.380,0:02:56.260 Marvin Cassow 0:02:56.260,0:02:57.080 Rob Waterhouse 0:02:57.080,0:02:57.600 mo 0:02:57.600,0:02:58.240 AaronTheWhite 0:02:58.240,0:02:59.420 James Castañeda 0:02:59.420,0:03:00.340 Danny Maloney 0:03:00.340,0:03:01.280 Jordon Long-Lay 0:03:01.280,0:03:02.040 Markus Arzner 0:03:02.040,0:03:02.780 Gustav Swan 0:03:02.780,0:03:03.600 Jerry Lambdin 0:03:03.600,0:03:04.320 John Bailey 0:03:04.320,0:03:05.420 Spinning 3 plates 0:03:05.420,0:03:06.260 Rashid Ali 0:03:06.260,0:03:07.260 Calling Castleman 0:03:07.260,0:03:08.100 David Silverman 0:03:08.100,0:03:08.680 Izzy? 0:03:08.680,0:03:09.520 Coppertone 0:03:09.520,0:03:10.520 Maggie Paxkowski 0:03:10.520,0:03:11.320 Winston Caiuwood 0:03:11.320,0:03:11.940 Lexy Schwinn 0:03:11.940,0:03:12.700 Spencer Lightfoot 0:03:12.700,0:03:13.520 Robert Wetzel 0:03:13.520,0:03:14.360 Fortunate Calf 0:03:14.360,0:03:15.200 Anthony Beckett 0:03:15.200,0:03:16.400 and: Skye Chappell
Templars: You owe us money, your majesty. Phillip IV: help! I’m being harassed by Usury heretics! Pope: hold up! These are my men, and I get a say in how they’re treated! Phillip IV: nevermind, I’ll just burned them all at the stake!
I have always imagined a medieval king accidentally time traveling to modern days and then, not knowing what to do he would walk into a supermarket or any grocery store and be amazed
A great example was the bankng system used by the Knights Templar. People going on pilgrimages could deposit their money in Paris and get it out in the Holy land. The Templars were allowed to lend money and charge interest. This made the Templars rich and they loaned huge sums to the French king.......who had them all tortured and burned alive as heretics.
Fun fact: The Medici had a standardized florin with the exact same amount of gold, (I want to say twelve point nine grams or something but I have number dyslexia and I can’t remember everything.) so if you went to Russia or England it was worth the exact same amount of money. But after the bank fell everyone made their own and there was no longer a standard amount of gold.
So if you could travel quickly enough to beat the banks rider you could deposit some money wait a few days then take the money out and immediately ride for a far away branch and withdraw the same money again before the records were updated? Or did they make you wait days/weeks for money to clear?
I did remember it differently. I remember that one person had to fart into a empty bottle, and give it to the popes right hand. He in return opened the bottle and smelled it. When the flavor was 7 years old the interest rate was 7% when it was above 7 years, there wouldn't be any interest Rates and the person got 1.5 cows for 5 days.
In case you wonder, yes. The Medici were brought down by the English king that didn't pay their loans back. If the Medici managed somehow to get the money back, it is likely they could have strengthen Florence position and also have an ever greater influence over the Italic league, thus unifying Italy.
Once, I borrowed money on really good terms and remarked “Thank you so much. I don’t know how I will ever repay you. No, really, I don’t.” They weren’t quite as amused as I was by the joke.
Reminded me of the Banking Clan in Star Wars, and their ugly faces. They begun the fight, but in reality they were in cahoots with Sheev Palpatine, which was known to them as Darth Sidious...
Huh, didn't even mention the Knights Templar and how that help spur the redevelopment of banking in Euro and development of banking systems before France went "yoink" on them.
I thought one way of getting around the no interest rule was to outright sell money. You would sell 100 florins today for 110 florins paid at a later date.
Thank god ypu made avideo on that. I had a real intense discusion with someone who realy argued that debts are a universal constant which must be repaide else the universe explodes and I troed to explain that in times long past debts where rdgularily "deleted" mostly, or even exclusively, by kings and lords who just revused to pay there debt to a Bank or, even worse, killed anyone affiliated with that bank.
It wasn't the same as a credit rating. It's a "knows what needs to be done to keep the bank in business" rating. They couldn't legally charge you interest, but as they said, if you're known to not be in on the scam on how to get around usury laws, then there's no reason for banks to do business with you. Even today, if you want a line of credit at the bank, and have the assets to back it up, you will get charged a fee even if you don't use the credit line. Just by opening the credit line the banks have to set aside money to loan you in case you want it, so in some ways it's kinda like they already gave it to you, except they can't charge you interest. So there's an annual fee. For businesses with large enough lines of credit such that it places a meaningful strain on the bank's finances to keep such credit lines open, they'll even pay a "don't call it interest" fee based on the amount of credit that they have available and *don't* use. If you have a no annual fee credit card and don't use it, expect to start being charged an annual fee eventually, assuming they didn't promise no annual fee, in which case they'll just close your account. If you at least charge things on it, the bank charges the merchant something for the privilege of not having to handle cash and so is fine if you don't keep a balance. Despite what some people might think, I don't think keeping a balance helps much on your credit score compared to having a large amount of available credit, constantly having some of it be in use, and making all your payments on time. It's just that keeping a balance means you'll constantly have some of it in use, and for a long time a lot of places didn't take credit cards, so if you wanted to be sure you had a balance on your card, you couldn't pay in full every month unless you went out of your way once a month to buy something somewhere on credit, which is bad for spending habits. Now that you can charge practically anything and set up electronic payments to trigger on a given date, just put your groceries and gas (or metro pass) on your card, set up your card to be paid on the due date, leaving plenty of time to rack up new charges while your old ones are still in the grace period, and you'll be fine from a credit score perspective and won't pay any interest.
