The development of money and banking is often understood as a series of solutions to the inefficiencies of barter. In a simplified model, villagers transition from direct exchange to using a common medium of value, such as stones, to facilitate trade. As economic needs grow, this system evolves to include credit, where parties record debts to be settled later, and interest, which compensates lenders for the time-value of money. Banks emerge as intermediaries that match those with excess capital to those in need of credit, creating a system where assets and liabilities are tracked on a balance sheet. This structure introduces the concept of liquidity risk, where a bank may be solvent—meaning its assets exceed its liabilities—but unable to meet immediate demands for cash, potentially leading to bank runs. To manage these risks and facilitate payments, banks develop systems like gross settlement and net debt settlement, which allow for the efficient transfer of value between institutions. While these models provide a useful framework for understanding financial evolution, they are distinct from historical accounts of economic development. Modern banking, as described by the Bank of England, operates differently than the common misconception that banks merely act as intermediaries for existing deposits. Instead, commercial banks create money through the act of lending, a process ultimately influenced by central bank monetary policy. The hierarchy of money is fundamentally built upon layers of trust, where different forms of credit and currency are accepted based on the perceived reliability of the issuer, whether that is a local bank or a sovereign government.