The History of Banks | How They've Changed through the Years
SIMILAR ARTICLES & IDEAS:
The initial card offered by Diners Club didn’t involve revolving credit, and the dues were to be paid off in full by the end of the month. The credit cards that we see now came much later.
Initially targeted at salespeople, the company started charging a $3 annual fee and also charged the establishments 7 per cent for each transaction. The paper-based cards showed tremendous growth in a year, with 20,000 people using it.
Eventually, the Diners Card became a status symbol and more and more establishments began to trust it. The company printed a list of participating merchants for the help of the members.
Innovative ideas, like associate cards for married women who wanted to shop in the afternoon using their husbands money became popular.
The instruments of trade and finance, like paper money, are groundbreaking inventions, put to use by collective acceptance using authority and seals of trust.
The financial crisis of 2008 showed that the system can buckle anytime and money may not always be worth the same.
As we get hyper-connected, the state-backed authority of currency, and what Money is really worth, is being rethought. Society has historically tried to invent new forms of currency, most recent being Bitcoin, a cryptocurrency.
The idea of Facebook's Libra, an attempt to create a new currency made from the architecture that powers Bitcoin, is that the value of new money is not derived from state authority, but a combination of mathematics, global connectivity, and trust that resides in people using Facebook.
A financial crisis is often associated with a panic or a bank run where investors sell off assets or withdraw money from savings accounts.
Generally, a crisis is caused if institutions or assets are overvalued, and can be worsened by panic and herd-like investor behaviour.
Contributing factors include systemic failures, unexpected or uncontrollable human behaviour, regulatory absence or failures, or contagions that is like a virus that spread from one institution or country to the next. If left unchecked, an economic crisis can cause a recession or depression.