As Greek commerce developed, multiple systems of coinage were in active use in the markets of multiple city-states, and created significant demand for savvy bankers, money-changers, and related financial professionals.
Like many other ancient civilizations, Greek banking was often centered around the Temple. Grecian temple bankers took deposits, made loans, and engaged in money-changing (i.e., exchanging currencies), as well as services in validating the purity and authenticity of coinage. Greek foreign exchange services by were provided by merchants, money-changers, and pawnbrokers, and both private and city-government backed money lenders operated out of temple banks.
Credit: Creative commons photograph by Steve Swayne, licensed under CC BY-SA 2.0Greek banking customs evidently varied between cities and city-states. In some cases, deposit accounts in which valuables would be vaulted for security included many categories of hard assets—including jewelry and bullion—in addition to coins. Like modern bankers, a portion of the cash held in certain accounts was allowed to be loaned out at interest, and the loans could be secured with gold, silver, copper, and slaves.
Interest rates between 6-10% were recorded in some cases, with Demosthenes claiming c. 350 BCE that 10% was the standard rate for most business transactions, with the rates climbing to 20-30% for the financing of high-risk enterprises, such as overseas voyages. There was evidently no record of prohibitions against "usury" (i.e. charging exorbitantly high rates of interest on loans).
Governments—typically avid borrowers and spenders in all ages—were on record as early as 430 BCE as having borrowed money in Greece, when the state was given a loan by bankers from the temple of Athens. The Temple of Artemis at Ephesus was also noted for its vast treasury, and its temple bankers provided banking services to a variety of Greek notables, including Aristotle. Many of the largest bankers made loans for the financing of ships hauling freight overseas, the financing of mines, and the construction of new buildings by the government. Credit: J.A. Fiedler After Albert Rieger (1870), in the public domain.
Evidence has also been found of credit notes traded by moneylenders operating out of Greek ports. The notes enabled their clients to redeem the credit notes for cash at designated locations in distant ports, without the danger of transporting large quantities of gold and silver bullion coins on overseas voyages— which were perpetually menaced by the hazards of storms and the threat of piratical attacks.
At least in later years, the profession of banking was not confined to the Temple bankers. One of earliest secular bankers was a certain Philostephanus of Corinth. Athenian politician and general Themistocles was evidently one of his customers, and deposited seventy talents in his bank— a sum estimated as the U.S. dollar equivalent of around $420,000.
Rags to Riches: Emancipated Slaves Become Wealthy Greek Merchant Bankers
As Greek commerce flourished, an influx of foreigners seeking lucrative opportunities in finance converged on the islands. Many of the early bankers in the Greek city-states were "Metics," resident aliens. At least two notable bankers were also former slaves who were emancipated by their former owners.
In the 4th century BC, two Athenian private bankers, Antisthenes and Archestratus, employed a "barbarian" slave named Pasion, who was evidently given the opportunity to work in the banking industry. Pasion become so successful that he won both his freedom and eventual Greek citizenship, after which he became remarkably wealthy.
Credit: Photograph by Dean Dixon, Sculpture by Alan LeQuire, licensed under the Free Art License (FAL)Pasion owned ships, farms, real estate, and cash-flowing businesses (including the largest shield factory in Greece, by one account), and he was believed to be one of the wealthiest men in Greece. One of Pasion's own slaves, Phormio, was also set up as a banker. Phormio eventually followed in his master's footsteps in becoming very rich, in addition to winning his freedom.
Many less famous cases of wealthy merchant bankers, money-lenders, and money-changers prospering in ancient Greece abounded through the centuries. Money-changers frequently set up business around temples and public buildings, often working at their trade from trapezoidal tables. It was from these that the money-changers derived their Greek name of "trapezitai," after the trapezoidal benches at which they worked their trade. (Much the same was true of the "bankers" of the later Roman and medieval periods. They derived their name from their trade benches known in medieval Latin as "banca," which was the basis of the English words "bank" and "banker.")
Because of the wide array of different types of coinages from the surrounding kingdoms and territories, money-changing was essential to trade, as businessmen had to keep careful track of variations in the quality of coinage, as well as to detect debasement and counterfeiting— both of which appear to have been practiced for as long as coins have ever been struck.Credit: Creative commons image by EDSITEment, in the public domain.
One of the notable forms of money lending practiced at the Greek port towns and cities was the financier's trade known (in English) by the peculiar name of "bottomry" — the financing of overseas freight hauled by merchants on sea voyages. The high risk associated with such ventures reportedly led to a high rate of interest being charged on such loans.
The Temple Bankers of Delos
One of the most important banking centers of ancient Greece was the barren Aegean island of Delos. Delos was a barren offshore island with minimal natural resources, but which possessed a large harbor and the renowned temple of Apollo. The island and the riches that would be drawn toward its famous temple from afar are evocatively described in a Homeric Hymn to Delian Apollo, written c. 51–60: "Delos, if you would be willing to be the abode of my son Phoebus Apollo and make him a rich temple –; for no other will touch you, as you will find: and I think you will never be rich in oxen and sheep, nor bear vintage nor yet produce plants abundantly. But if you have the temple of far-shooting Apollo, all men will bring you hecatombs and gather here, and incessant savour of rich sacrifice will always arise, and you will feed those who dwell in you from the hand of strangers; for truly your own soil is not rich."
Credit: Carl Rottmann, in the public domain.A great deal of trade and commerce grew up around the harbor and the temple on Delos, until the city grew large and prosperous, eventually evolving into a major center of international banking activity. Delos became a center for the importation and exportation of commodities to and from distant locations, including goods from caravan routes in lands as far away as China and India. In its heyday, Delos was such a favored center of maritime trade that richly laden trading ships approaching its harbors became the targets of pirates— prompting the island's government to finance construction of a fleet of ships to chase the pirates down.
For centuries, the magistrates of Delos kept detailed accounts of transactions, leaving behind a great deal of evidence concerning the nature of business on the island. The Bank of Delos operated through credit transfers, while silver and gold was vaulted in the treasuries of the Temple of Apollo. Delos served as a bridge between merchants and bankers from surrounding realms. A number of Italian merchants eventually took up residence in Delos and became citizens, and many of these went on to become the city's most important bankers.
The Italian bankers of Delos are credited with linking the island's commerce to the great commercial centers of the Roman empire as the latter grew in power over time. Carthage and Corinth were the main rivals of Delos— so when both competing cities were later destroyed by the Romans, Delos was consequently in an even more enviable position to rise as a banking and financial center, as well as a commercial port. By some accounts, the Bank of Delos went on to become the model for many of the banks of the Roman Empire.