It is generally accepted that the first bank in the world was established at the peak of the Italian Renaissance in Siena in the fifteenth century. At that time Sienna was part of the Republic of Florence which was one of the most powerful financial centers in Italy. The bank is called Banca Monte dei Paschi di Siena and in its original form was created in 1472.
However, there is some disagreement about which is the oldest bank in the world, for two reasons. On one hand, the definition of ‘banking’ is an important separator, since the current format of commercial banking was preceded by merchant banking in the early days of European finance by several centuries. Strictly speaking, the oldest bank in the world, without distinguishing between commercial and merchant banks, is the Berenberg Bank in Hamburg. Founded in 1590 in what was then the German part of the Holy Roman Empire, it is the oldest bank of any kind operating continuously with the same legal identity. Interestingly it has been owned and controlled continuously by the same family from the time of its foundation – more than 400 years!
Because of the change in the structure of banking during the two centuries following the founding of the Siena bank, Banca Monte dei Paschi di Siena was reformed into its current form in 1624. For this reason, there is some disagreement as to whether Berenberg or Banca Monte dei Paschi di Siena should be ranked as the first bank in the world.
The 5 oldest merchant banks established after the foundation of Berenberg in 1590 came inside a small window of just 25 years starting in 1664. This was the period in which England established itself as the major power in the world, colonizing North America, Ceylon, Southern Africa and establishing the major trading routes under the control of its Navy. So of the 5 oldest banks in the world, three are English banks. First was established in 1664, known as Child & Company. The bank still exists, as a subsidiary of the Royal Bank of Scotland. Following that in England came C. Hoare & Company, in 1672. It is the oldest privately owned bank. Last of the five is Barclays Bank, founded in 1690. It still operates under that name and is one of the major UK commercial banks to this day.
In 1668, the Kingdom of Sweden established Sveriges Riksbank, which still operates to this day, but in the form of the Swedish central bank, and it ranks as the oldest central bank in the world. In 1674, another bank in the Holy Roman Empire was created in the Free City of Frankfurt, known as the Metzler Bank.