What are banks?

Like, what function at their core for society do banks perform?

Wow, I love that question.

I have to put a plug in before I even answer it for the book that I wrote about a decade

ago with Steve Haybrook called Fragile by Design, which is about the modern era from

the perspective of banks. That is, understanding the era from the perspective of banks,

that is understanding the history of the world

from the perspective of something that started about 400 years ago,

which is the chartering of banks.

So the first thing in answering your question that somebody has to do

is decide whether they want to talk about a generic

thing called financial intermediary that does some kinds of transactions involving lending,

maybe, or maybe payments transfers, or maybe both, or maybe managing a portfolio, or maybe, you know, who knows what financial transactions. So,

you know, by that sort of definition, the Rothschilds were clearly a bank. They were a private bank.

Lots of other, the Medici were a bank. But when I use the term bank generally, that's not the way I use it.

I use it to talk about a modern element.

That is, when I say modern, I mean something about the modern world starting around

1600 that distinguishes this world from its prior worlds.

And the reason I focus on that way of thinking is that the nation state created by the

modern world charters banks.

And it's the chartering of banks that makes them in my mind so interesting, not just as an economic function, but as a political

reality. And I want to really emphasize every nation state charters banks. By the way,

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