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The art of investment banking has been around for centuries, and by no means started with Wall Street. If you look back many hundred years, the Church had outla
by Shenglong 15y ago
The art of investment banking has been around for centuries, and by no means started with Wall Street. If you look back many hundred years, the Church had outlawed usury (charging interest on loans), effectively meaning lenders had no more incentive to lend to people who needed it.
To solve this problems, some of the first derivatives were invented (yes, some derivatives have a purpose). A lender would trade money to a farmer in exchange for, say, a flock of sheep (although the farmer would keep the sheep). Their repurchase agreement would state that after a year, the farmer would buy the sheep back from the lender, but any baby sheep would still belong to the lender because they were born while the sheep were in the lender's possession.
SV might do fine with WS, but I really do believe finance and tech work well, hand in hand.
- winestock 15y ago>If you look back many hundred years, the Church had outlawed usury (charging interest on loans) Correction: Usury was the charging of interest on an unproductive loan. If the principle of the loan was meant to buy food for a family, then the lender could not charge interest. If the principle was meant to start a business then the charging of interest was not usury. The big problem was that, for a long time, theologians followed Aristotle on the question if money, itself, was "fruitful" or not. Aristotle said that it wasn't. In the later Middle Ages, theologians made a distinction between money and the uses of money. That distinction led to the conclusion I gave in the previous paragraph. Okay, I'm nitpicking, but this medieval usury issue is a pet peeve of mine.
- Shenglong 15y agoI actually was not aware; I appreciate the clarification!