Banking and Money
I hope the foregoing has demonstrated that currency flowed through the entire economic body of Europe. I hope it has dispelled any notion that we are dealing with a barter economy or a moneyless economy.
Money had been used throughout the Middle Ages. There was a time when it had been less important, but from around 1100 or so, money became increasingly important as both trade and cities grew at a steady pace. Whether it was pennies or pounds, money was needed in every part of Europe and by nearly every class. Indeed, one of the hallmarks of being "poor" was to have no coin whatsoever. The poor lived on what others provided.
Since money made the world go round, and since banks are all about storing and moving money, we will turn next to this question: what's money? More particularly, what forms did money take in the period we are studying?
Types of Money
Medieval money can be divided into two distinctly different types: the kind that existed and the kind that didn't.
Real money was currency and specifically coins of various qualities and weights. There wasn't really any paper money yet. The other kind was called "money of account" — (no, this doesn't mean "on account of I ain't got none"). This was purely an accounting unit, used for large-scale transactions and never turned into a physical object. Money of account was needed in part because the coinage of Europe was designed for fairly small transactions, but it was also needed because it helped facilitate international trade where money had to move between multiple currencies.