Banks
Institutions that lend out money they promised to return on demand. The maturity mismatch is the business.
The invention
The problem. Merchants needed money available in one city that they had earned in another.
The Medici built a network where a bill drawn in Florence settled in Bruges, moving value without moving coin and routing around the prohibition on interest. Banca Monte dei Paschi di Siena, founded 1472, still operates and is the oldest surviving bank — and has required state rescue in living memory, which is the whole story in one institution.
Banknote motif: band of lathe work ornament
ca. 1824–42 · The Metropolitan Museum of Art · CC0
Architectural drawing for a bank building ("Federal Reserve Bank"), Minneapolis, Minnesota. Front perspective
1924 · Library of Congress · Public domain
Where it has failed
Not a list of disasters. A pattern library.
- 1494Florence
The Medici bank fails
Overextended sovereign lending, particularly to the English crown, plus weakening control over branches.
The most sophisticated institution of its century failed for the most ordinary reason: lending to borrowers who could refuse to repay.
- 1907New York
The Knickerbocker panic
A failed copper corner triggered runs on trust companies; J.P. Morgan personally organised the rescue, which led to the Federal Reserve.
Before there was a lender of last resort there was a man. Institutions are what happens after a crisis proves that cannot be relied on twice.
- 2023California and Switzerland
SVB and Credit Suisse
A bank run executed at the speed of a group chat, and a 167-year-old institution absorbed over a weekend.
The maturity mismatch that defines banking has not changed since Florence. Only the speed of the run has.
Where it stands today
You now have the shape. Here is the reading.
Live from public data, pulled at request time. Read it with the failures above in mind — not because a repeat is due, but because knowing the mechanism is what lets you recognise one early.
Federal funds rate
Federal Reserve via FRED
No data returned
FRED (St. Louis Fed) needs FRED_API_KEY in your environment. It is free to obtain — see the sources screen for the link.
Federal Reserve via FRED
Personal saving rate
U.S. Bureau of Economic Analysis via FRED
No data returned
FRED (St. Louis Fed) needs FRED_API_KEY in your environment. It is free to obtain — see the sources screen for the link.
U.S. Bureau of Economic Analysis via FRED
In your ledger
Your checking balance is an unsecured loan to a bank, insured to a limit. Most people have never framed it that way, and most of the time it does not matter.
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