ABSTRACT
Barings merchant bank was founded on New Year’s Day in 1763. Merchant bankers were originally merchants who used their good name to guarantee the trades of other merchants. For example, a trader in India might want to sell a cargo of spices to a merchant in London. If the seller merely accepted a bill of exchange from the buyer, it might prove worthless leaving the seller unpaid. In order to facilitate trade, smaller merchants paid a commission to respected merchants such as Barings to guarantee their bills (e.g. Wechsberg 1967).
