Slideshow Financial Innovation Through the Centuries

  • October 01 2012, 11:19am EDT
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9000 B.C.: Medium of Exchange

Our ancestors barter with produce and cattle.

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5000 BC: Shell Money

Settlers in southeastern Europe trade spondylus shells as a form of currency.

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1000 B.C.: Metal Money

Chinese "tool money" serves as one of the earliest forms of coins.

806 - 1023 A.D.: Paper Money

Banknotes appear in China.

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14th Century: Bonds

Financing war serves as the "father of the bond market" in Renaissance Italy as wealthy citizens in its city-states are forced to lend money to fund armies in exchange for interest upon repayment.

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1688: Insurance Brokerage

Edward Lloyd's London coffee house becomes a center for marine insurance.

1710: Futures

A rice futures market is set up in Japan.

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1913: Federal Reserve System

Woodrow Wilson signs the U.S. Federal Reserve Act, which establishes the nation's central banking system.

1933: National Deposit Insurance Scheme

The U.S. creates the Federal Deposit Insurance Corp. in response to a number of bank failures during the Great Depression.

1938: Secondary Mortgage Market

As part of President Franklin Roosevelt's New Deal, Fannie Mae establishes a secondary market for U.S. mortgages.

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1949: Hedge Funds

An absolute return or "hedged fund" is created by financial journalist-turned-investor Alfred Winslow Jones.

1950: Early Credit Card

Diners Club International launches the first multi-purpose charge card.

1958: Modern Credit Card

Bank of America launches a credit card with a revolving line of credit.

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1960: ATMs

A U.S. patent is filed for an early cash dispenser.

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1971: Floating Exchange Rate

The U.S. abandons fixed exchange rate system, a decision largely influenced by then Under-Secretary of the Treasury for International Monetary Affairs Paul Volcker.

1971: Money Market Mutual Funds

The first money market fund - a type of investment which regulators are currently trying to reform - is set up in the U.S. by investment consultants Bruce R. Bent and Henry B.R. Brown.

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1972: Debit Cards

City National Bank of Cleveland issues an ATM account debit card.

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1973: Point of Sale Terminals

IBM launches point of sale terminals that are linked to a mainframe store computer.

1976: Modern Microfinance

Nobel Peace Prize recipient Muhammad Yunus begins research that leads to the first microfinance bank - Grameen Bank in Bangladesh - in 1983.

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1994: Credit Default Swap

Under the direction of its current head of global commodities Blythe Masters, JPMorgan Chase structures one of the first credit default swaps.

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1999: Online Payment Service

PayPal, led by founding investor Peter Thiel, launches online payments.

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2009: Digital money

"Satoshi Nakamoto," a mysterious computer programmer, introduces Bitcoin, a decentralized, digital crypto-currency with disruptive implications for the banking and payment systems.

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