1

The History of ALM

Scribitur historia ad narrandum, non ad probandum. (Quintilien)

It is not possible to present ALM history without presenting Banking industry history even if it is possible to make a parallel with the Insurance industry.

This Part is an opportunity to present the links between ALM and the other types of business such as investment management, hedge funds and financial directions of corporate industries, etc.

1.1 THE HISTORY OF THE BANKING INDUSTRY FROM ANTIQUITY TO THE MIDDLE AGES

1.1.1 Origins of banking

The origins of banking go back to antiquity. Historians discovered hints of banking activities dating from 3000 B.C. in Mesopotamia. The temples were places of trades and the priests used to take on the role of banker, taking money as deposits and lending money to the King or to the merchants. Temples were considered as the safest places where gold could be stored.

The first records of loans dating from the 18th century B.C. made by temple priests to merchants were discovered in Babylon.

Remember that in the Bible, Christ drives the moneychangers out of the temple…

In Ancient Greece, the temples conducted not only loans and deposits but also currency exchange and validation of coinage. Each Greek city was independent and minted its own money. Moneychangers appeared in order to develop trade between cities.

The letter of credit made its appearance: in return for a payment, a moneylender in one Greek city would write a credit note and the client would cash ...

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