SUMMARY OF PAGES 31-

64
CHAPTER 1:DREAMS OF
AVARİCE

• TEOMAN DEMİRKAYA
• MOHAMMAD HASAN DAVLATZAİ
• RUAH ALKHATEEB
• AKİL AMİN LAKHANİ
Loan Sharks: The Evolution of Money Lending
and Its Historical Impact"
• The text discusses the historical context of early money lending, particularly in Italy
during the thirteenth century, and the role of a mathematician named Leonardo of Pisa
(Fibonacci) in introducing advanced mathematical and financial concepts to Europe.
These concepts included the decimal system, fractions, present value, and Hindu-Arabic
numerals, which facilitated complex financial calculations and commerce. The text also
explores the cultural and legal barriers that ethnic minorities, such as Jewish
moneylenders in Venice, faced in the lending industry due to societal taboos against
usury. The reference to Shakespeare's "The Merchant of Venice" is used to illustrate the
challenges and prejudices faced by minority creditors. Additionally, the text briefly
mentions contemporary issues of illegal moneylending in the UK and provides insights
into the impact of loan sharks on economically deprived areas.
39-46 PAGES
MOHAMMAD HASAN DAVLATZAİ

• The text describes the rise of the

Medici family in Renaissance
Florence, highlighting their
transformation from currency
traders into powerful bankers.
Giovanni di Bicci de' Medici played
a key role in this transformation,
expanding the family's banking
business and establishing branches
in various cities.
• The Medici bank was profitable due to its
diversification and decentralization, posting
high returns on capital. Giovanni's son,
Cosimo de' Medici, effectively controlled the
Florentine state. The family's power and
influence extended to political matters,
making them a dominant force in Florence.
Despite some setbacks and opposition, the
Medici family's ascent was marked by their
financial acumen and business success.
 • The text discusses the evolution of
banking from the Medici family's role
in early banking to the development
of modern banking systems in
47-55 Europe. It mentions how the Medici
PAGES family expanded their banking
operations, made expensive
RUAH ALKHATEEB
mistakes, and eventually faced
financial turmoil. It also talks about
the emergence of banking
innovations, such as fractional
reserve banking and central banks, in
Amsterdam, London, and Stockholm.
highlights the transition from
money being based on
precious metals to a system
where credit and bank
liabilities became the
foundation of the modern
monetary system. The role of
banks in facilitating trade
and financing
industrialization is also
mentioned.
Overall, emphasizes the
importance of financial
innovation and the
interdependence of banking
and economic growth. It
shows how banking systems
evolved and adapted over
time to meet the changing
needs of society.
Banking Crisis in the 18th and 19th centuries
• The banks started to faced with some problems in 18th century, 19th century as
liquidity, stock, etc. Main problem was “liquidity crisis” in 18th century.
• Victorian monetary problem. It should be emphasized that the monetary
problem of Victorian period was not completely solved by Walter Bagehot.
• After 1858, restrictions on joint-stock banking were lifted, paving the way for the
emergence of several large commercial banks. For instance, the London &
Westminster(1833), Lloyds(1884), etc.
• The critical need was not for banks actually buy large amounts fo shares
invindustiral companies.
• By 1913 British savings bank deposits ampounted 256£ million. The assets of
German savings banks were more than two times greater than those.
• As a result, Banks have come a long way from the temples of the ancient world,
but their basic business practices have not changed much. While history has
changed the finer points of its business model, the goals of a bank are still to
provide loans and protect depositors' money.
Walter Bagehot
The Editor of The Economist
Bankrupt Nation
• Bankruptcy; It is a legal process in which individuals or organizations
that cannot pay their debts can request relief from some or all of their
debts. Bankruptcy is initiated and enforced in most jurisdictions
through court proceedings, usually initiated by the debtor.
• In U.S. there is a city it’s named Memphis, Tennessee. It’s famous whit
for blue sued shoes, barbecues and bankruptcies. Why it’s famous
bankruptcy?
• As Niall Ferguson mentioned that, ‘When I visited Memphis for the
first time in the early summer of 2007 I was fascinated by the ubiquity
and proximity of both easy credit and easy bankruptcy’.
• The ability to walk away from unsustainable debts and start all over
again is one of the distinctive quirks of American capitalism. The
theoryis that American law exists to encourage entrepreneurship. The
law give a chance to creation of a new business.
• At the first sight, the theory seems working. Many America’s most
successful businesseman failed once. For instance, the ketchup king
John Henry Heinz, the automobile magnate Henry Ford, etc. They
became immensely rich, because the law give a chance to them.
• Bankruptcy key have designed to help entrepreneurs and their
businesses, but nowadays 98 per cent of filings are classifirsd as
non-business. Henry Ford
• The root cause, however, must lie in the evoluation of money and
the banks whose liabilities are its key component. There is a huge
demand to the money and that is why a credit boom has occurred.
• As a result, the evaluation of banking was thus the essential first
step in the ascent of money. The flnancial crisis that began in 2007 is
related with this unconscious lending.

John Henry Heinz

THANKS FOR LİSTENİNG