Iron, silver, especially gold, pepper and most notably slaves were to be found deeper in the three continents that surround the Mediterranean. But at the first century BC Rome drew the center of commerce to the west. Slaves, iron and wheat were the main resources, Rome needed on its first days as an empire. Athens, Corinthos and the Greek cities became important once again, as stations for transit trade.”
The usage of coinage played crucial role in trade. Coins were mostly silver, although bronze coins were used mostly in everyday exchanges. Cities cut their own coins, but there were groups of cities that had the same system, so every denomination had the same weight.
Coins of other civilizations were in use too. For example in the classic period the Persian “darikos” was broadly used, and it consisted of 8,4 grams of gold. In the classic era the Athenian drachma was always in high demand, and always abundant, thanks to the limitless silver that was extracted in Laurion. Soon, in , almost all cities in the Aegean and many in Minor Asia used it.
In the Hellenistic period, a changing geopolitical situation brought about a change to the currencies which were being used by the Greeks. Macedonia, now a much stronger power, minted the coins which were most commonly used. Macedonian currency, like the coins minted in Athens, consisted of 9 grams of pure gold. Its silver denominations, with Alexander the Great on the side, flooded the Aegean markets. Later on, it was the Roman denarii that were used broader.
The Greek economy had a free market for currencies. Although there were regulations and restrictions inside each city, anyone could use any type of coin in trade and in general in exchanges. No central power ever managed or aspired to impose one common currency was. The usage of coins not only made trade easier but opened the way to credit and the banking system.
This broad variety of coins created the need for currency exchanges. In the 5th century, during the classic era, the first banks were created. Banks got their name, by the bank, the table on which bankers worked. They accepted deposits and invested them to make profit. One could make a deposit to secure his money in a safe place, or to make transactions or even make payments through the bank.
The interest rate on deposits was rarely regulated and stable throughout the centuries, between 10% to 12 %. Banks most of the times lent to rich citizens, since common people borrowed from their family without interest rate. But banks had an interest rate, usually near 18%. Unfortunately we have no evidence of private banks lending to cities. Most banks were private, but there were public banks too. Athens and Delos, Kos, Tinos, Militos were famous.
These banks rarely lent money to individuals. They were used for safety deposits, and they lent money to state treasuries that were empty. Public banks assisted in the process of tax collection.
In his seminal work, “Politics”, Aristotle describes the need for the polis: