In times of crisis, we increasingly hear the word “bankrupt”. Bankruptcies of enterprises and financial structures are becoming commonplace. How did the term “bankrupt” come about and what does it mean?
Since ancient times, money changers have been engaged in the exchange of coins of one state for coins of another state. Their activities resembled the work of modern currency exchange offices. They sat in major port cities or in commercial areas.
The money changers were real experts in their field - on the spot they could determine the authenticity of the coin and its course towards coins of other countries. For the successful conduct of their business, they always had reserves of coins of various states at hand.
Money changers united in partnerships and had their representatives in different parts of the world.
Many wealthy merchants preferred to keep their savings with money changers. Having gone to other countries, they did not carry cash with them, which was quite dangerous, but took a receipt from the changer and, upon arriving at their destination, presented it to local money changers and, having paid a certain amount for a "non-cash settlement", received the required amount.
Back in the twelfth century in Genoa, money changers were called bankers, from the Italian word banco, which meant a bench or a bench. I meant the same bench on which sat a man who had all the information about the monetary systems of various countries of the world and transferred money from one monetary system to another.
It was this bench that later gave the name to banks - financial institutions that attract funds and issue loans at a certain percentage.
Modern large financial enterprises originated from the change. Over time, money changers accumulated huge capital, kept deposits of various strata of society - from the elite to ordinary townspeople and peasants.
Often, they financed very dubious projects: pirate expeditions, the slave trade. The era of primitive capital accumulation was marked by terrible crimes.
Fraud was also involved in exchange transactions. Not everyone had the same knowledge in finance as the money changer had. Therefore, the "simpleton" could make an exchange at a lower rate, or even slip a counterfeit coin. But, if the money changer was caught in deception, then the punishment followed immediately. The enraged townspeople chased the swindler away from his familiar place, and publicly broke his bench. Therefore, the expression “banca rotta” literally means “broken bench”.