Banking history: why did the first "bank" appear in a temple?

Today we put our money in a bank because the bank building is guarded, accounts are kept and the law protects us. Now imagine: there is no safe, no police and no bank. Your harvest does not fit in your storehouse, and your neighbour is asking for seed to sow. In such a world, where was a reliable "place of safekeeping"?

In ancient Mesopotamia the answer to this question was often the temple.

Why the temple in particular?

According to Britannica, researchers who understand the history of banking in a broad sense trace it back to ancient Mesopotamia: there, temples, palaces and some private households served as places where property was stored. Records of loans made by Babylonian temples go back to 2000 BC.

The reason for trusting the temple was simple: it was considered a sacred place, and people believed it to be under the protection of the gods. For a thief or a robber alike, touching such a place was dangerous. As a result, grain and other valuables accumulated in the temple storehouse, and the accumulated reserve made lending possible.

The two main functions of today's bank can already be seen here: 1. Safekeeping: someone hands over their surplus produce to a reliable place. 2. Lending: part of the accumulated reserve is given temporarily to someone in need and later returned.

When did debt and interest become a matter of rules?

As loans multiplied, so did disputes: how much is to be returned, when, and what happens if there is no harvest? The laws of the Babylonian king Hammurabi (18th century BC) contain separate articles on debt and the interest paid on it. For example, under article 48 in L. W. King's translation, if a storm flattens the harvest or the grain does not grow for lack of water, the debtor does not give grain to his creditor that year and pays no interest for that year.

So debt relations became not merely an oral agreement between two people but a matter regulated by rules set by the state. This is also the essence of today's banking legislation: both the lender and the borrower must be protected.

Example (prepared by the author, hypothetical figures). In spring the farmer Ur-Nanshe takes 100 measures of barley seed from the temple storehouse. Under the agreement he returns 110 measures in autumn. The extra 10 measures are a charge for the loan, that is, in today's language, interest. For the temple this is a way to "put to work" the grain lying in the storehouse, and for the farmer it is a chance to start sowing without waiting for a harvest.

Then and now

Conclusion: the idea of the bank began not with a "building" but with trust. People entrusted their wealth to whoever was reliable, and that party lent out the accumulated wealth.