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The Birth of Banking: How the Sumerians Invented Finance Before Money Existed

Long before stock markets, credit cards, or central banks, finance had already begun. Its birthplace was not Wall Street or Renaissance Italy, but ancient Mesopotamia — among the Sumerians, over five thousand years ago.
What makes this remarkable is not just how early it happened, but how familiar it feels.
The Sumerians lived between the Tigris and Euphrates rivers, in a land where agriculture created surplus for the first time in human history. Surplus changed everything. When people produced more grain, barley, and livestock than they immediately needed, a new problem emerged: storage, protection, and trust.
This is where banking was born.
Sumerian temples and palaces functioned as the first financial institutions. They stored grain, silver, and goods on behalf of individuals and communities. In return, they issued clay tablets — recorded agreements written in cuneiform — detailing deposits, loans, interest rates, and repayment dates. These tablets were not symbolic. They were legally binding financial contracts.
Interest, often assumed to be a modern invention, was already well understood. Loans of barley typically carried interest rates around 33 percent, while silver loans averaged closer to 20 percent. These were not arbitrary numbers. They reflected agricultural risk, time delays, and expected returns — the same fundamentals that still shape lending today.
Even more striking is the role of trust. Sumerian banking worked because institutions were seen as stable and authoritative. Temples were not just religious centers; they were economic anchors. Their permanence gave people confidence that deposits would be honored and contracts enforced.
Money, as we think of it today, did not yet exist. Coinage would come much later. Instead, the Sumerians operated on a system of standardized value. Silver served as a unit of account, while grain functioned as both currency and collateral. Finance emerged not from coins, but from record-keeping.
In essence, accounting came before money.
This early financial system enabled trade across long distances, funded large construction projects, and supported one of the world’s first urban civilizations. It also introduced familiar problems: debt accumulation, default, and inequality. Some tablets even record debt forgiveness decrees — early attempts to prevent social collapse caused by excessive financial pressure.
The foundations of modern banking are visible here in their rawest form: deposits, loans, interest, collateral, and institutional trust. Strip away the technology, and the logic remains unchanged.
The Sumerians remind us that finance is not an abstract invention. It is a response to human cooperation at scale. Wherever surplus exists, systems arise to manage it. And once those systems appear, power, stability, and vulnerability follow.
Banking did not begin as a tool of speculation. It began as a solution to a simple question: who can we trust with what we have today, so it still holds value tomorrow?
Five thousand years later, we are still asking the same thing.
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