EVOLUTION OF BANKING SYSTEMS AND CURRENT TRENDS IN THEIR DEVELOPMENT

Abstract

The evolutionary path of banking systems is conventionally divided into four periods: the first period is the Temple Period, when banking is just emerging, and the role of credit institutions is taken on by the temples of Babylonia, and over time, the temples of ancient Greece and Rome. In the Roman period of the

development of the banking system, a specialization of banking emerged, as evidenced by the division of bankers into mensaria, who were engaged in the exchange of coins, and argentaria, who were engaged in deposit, credit and money transfer operations.

The second period of the development of banking systems coincides with the Middle Ages and is associated with the emergence of specialized financial institutions that began to simultaneously engage in settlement, deposit, and credit operations as an organization. The revival of financial activity and the intensification of trade are the main factors that contributed to the development of banking during the Middle Ages. Іn the 16th and 17th centuries, prototypes of the first Central Banks began to appear, created at the initiative of the state to reduce the risks of banking activities and facilitate trade.

The third period of development of banking systems is associated with the emergence of the Bank of England in 1694, and the characteristic features of this period are the development of industrial production, an increase in lending and monetary settlements, including non-cash ones on a permanent basis. Deposit operations, securities transactions and emission operations acquire significant distribution and differentiation in banking practice.

The fourth period of the evolution of banking systems coincides with the beginning of the 19th century, when Central Banks began to operate in almost every country, which monopolized the function of issuing banknotes. This stage coincides with the era of scientific and technological development, during which the role of the banking sector is changing dramatically. Improving customer service, reducing risks in activities, and new banking management techniques have become guidelines for banking systems in this period of development.

Banking systems of that period were already characterized by the specialization of banks, as well as the formation of banking monopolies and the concentration of capital. International standards have come into practice in banking, and the consolidation of banking systems, as exemplified by the creation of the EU Central Bank, has become a new benchmark in its development.

Understanding the evolutionary development of banking systems, taking into account factors occurring in the world, can lay the foundation for developing a long-term banking strategy.