If you were a citizen of the Roman Republic 2000 years ago, March would have been a busy month for you.
2000 years of financial transformation
March 15th, also known as the Ides of March, signalled the beginning of a new year for the Romans. Courts would reopen and everyone was expected to settle their debts to start the new year afresh, and of course, avoid being sued. This was a very laborious task.
Fast forward to today, and you can see that the way we carry out our financial day-to-day tasks has changed exponentially. Advancements in technology have allowed us to connect with more people and has completely changed the way we bank.
Although your list of ‘reasons as to why I love the internet’ may not start with the latter, unfortunately, the majority of the population are not immune to paying bills (if you don’t have to pay any bills at all - count yourself very lucky).
Thankfully, technology has automated many of our financial tasks. Take online banking for example, over 9.6 million people in the UK log into their account every day to check their balance and send money. Can you imagine not having the option to tap into your five digit code and action a payment in seconds?
Although we may have sped up the process, there are still similarities between today’s financial environment and economic climate in the Roman Republic, 2000 years ago.
The above image (courtesy of MOLA) shows us that IOUs were issued to track what one person owed to another. Similarly, today we would draw up electronic contracts between a creditor and a borrower.
Another concept popular in the Roman Republic (and later Empire) was debt forgiveness. Legislation passed in 367 BC which allowed debtors to subtract the interest paid from the principal owed within a three-year window. As a result, in 342 BC interest was abolished altogether, but of course, that didn’t last long. Creditors began to refuse to loan out money, and soon the law was completely ignored.
Today, creditors can be forgiving (depending on the circumstances) and are willing to give borrowers good payment terms if they are deemed credit-worthy. By 2018, small businesses will have borrowed £580 billion across Europe, so there is a huge incentive to charge interest or fees, or both, especially to hedge any debtors that may not be able to pay back their loan.
So, although the finance industry today shares some of the same characteristics as the Roman Republic, it’s good to know that we won’t be mimicking what the day is well known for - the death of Julius Caesar. The Ides of March is shrouded in superstition, no doubt propelled into popular culture thanks to Shakespeare’s famous play in the early 1600s about the ambitious General.
Hopefully, your Ides of March brings you financial prosperity and little mutiny.