According to "Decoding: Banks - Episode 1 - How has the banking battlefield evolved," what role did goldsmiths play in the early development of banking? 1) They minted coins 2) They provided loans 3) They stored valuables and issued receipts 4) They set interest rates
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Step 1: Goldsmiths were originally responsible for storing valuables, such as gold and silver, for people. Show more…
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Let’s go back to 1866. The Ottoman Foreign Minister Fuad Pasha wants to send 10,000 pieces of gold to his Ambassador in Vienna, Sadullah Bey. Although the two capitals (Istanbul and Vienna) are connected by telegraph, there is no railway connection. So directly sending 10,000 pieces of gold will involve a horse drawn carriage with armed escorts. This is very costly. Thus Fuad Pasha decides to ask the assistance of his friend Mr. Gaston Auboyneau, the Head of the newly founded Banque Imperiale Ottomane (BIO). (Obviiously the bank will charge a fee but it is much cheaper.) Thus the Pasha gives 10,000 pieces of gold (+ the small fee) to Mr. Auboyneau and asks him to forward it to Sadullah Bey in Vienna. How can this be done WITHOUT physically sending 10,000 pieces of gold? Note 1: Although sending gold is expensive, sending paper is not. Sending info via telegraph is even cheaper and quicker. Note 2: Of course there is trade between the Ottoman and Austrian Empires, and it just so happens an Ottoman exporter from Istanbul has shipped goods worth 10,000 pieces of gold to a Viennese importer.
Breanna O.
'Which of the following is true about banks? Select one: a. Banks are financial institutions through which savers can directly provide funds to borrowers. b. Typically, banks receive few but big deposits, which they then use to make many small loans: C Through the checking accounts they facilitate; banks provide a medium of exchange: d. The interest rate banks charge when they lend is the same they pay for the deposits they receive:'
Manasvee S.
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