In "The Ascent of Money: A Financial History of the World," Niall Ferguson explores the essential role that banks play as intermediaries in the financial system. These institutions facilitate relationships between debtors and creditors, which has grown in complexity due to an increase in the number of financial entities. This evolution highlights the banking sector's importance in managing and streamlining financial interactions.
Banks are now primarily focused on gathering information about potential borrowers and assessing the associated risks involved in lending. This shift towards information-centric practices reveals how crucial banks are in maintaining the stability and efficiency of economic transactions, ultimately shaping the broader financial landscape.