Banks as one of the most widespread financial institutions became an integral part of people’s lives more than three centuries ago. They are at the center of the economic life of society, serve its interests, linking with cash flows, for example, industry and trade, agriculture and the population, etc. Subsequently, to solve problems and needs arising in this area, individual credit and financial organizations formed a banking system that needed to be managed and monitored by the banks themselves. This role in the economy is assigned to Central banks.

The central bank in the economic life of society is an organization responsible for the monetary policy of the state, that is, it acts as its official guide. It ensures the operability of the payment system and is responsible for regulation and supervision in the financial sector of the national economy. Based on this, the Central Bank acts as an organization that implements the currency policy of the state and conducts a state issue.

The first Central Banks appeared more than three hundred years ago. All of them appeared as a result of the historical development of commercial banks. One of the main reasons for the emergence of a Central Bank is the transition in the framework of monetary circulation from metal money to paper funds, as well as a result of the occurrence of related problems [1]. In this regard, of particular interest is the analysis of the reasons for the appearance and consideration of the predecessors of modern Central Banks in retrospect. This fact determines the relevance of the subject under consideration.

Researchers identify two main ways of the emergence of Central Banks:

1. Evolutionary — this path was followed by banks that emerged early enough in capitalist relations, that is, during the period of state-monopolistic capitalism. Central banks initially had the status of a joint-stock bank, however, in order to gain a dominant role, they had to go through the nationalization process. Thus, the bank changed from a joint-stock bank to an agent with authority received from the state.
2. Declared – the path implying the initial creation of a Central Bank, not a commercial one, that is, when this organization appeared, it was already endowed with functions delegated by the state. As a rule, such a path was accompanied by the publication of relevant regulatory documents [6].

Thus, it is possible to identify two key reasons for the emergence of Central Banks. The first is the need to create a state bank, that is, an agent that would redistribute part of the financial resources, in other words, make up the money issue. The second reason is the need for concentration and centralization of capital using a single national monetary system and the creation of an emission center.

Throughout the history of Central Banks, there have been heated discussions about the need for their creation and functioning. The first point of view was formed by representatives of the school of free banking. They believed that the very idea of the existence of a central bank restricts free enterprise in this area. The second point of view was held by the supporters of the monetary school, who fixed the idea that the Central Bank is necessary for direct control by the state by interfering in banking activities and conducting operations with private reserves. From a historical point of view, the representatives of the second option have achieved the greatest success. As a result, the first Central Banks appeared in Europe at the end of the XVII century, and now they are established and operate in almost all states [9].

Conditionally, all the predecessors of Central Banks in their modern understanding can be divided into two institutions:

1. The first created balance sheet liabilities in the form of a monetary claim to the Bank, which had the form of cash, but did not carry out circulation on the open market. Such obligations were:

— demand deposits (for example, the Venetian bank Banco di Rialto);

— bonds or term deposits (Vienna Stadtbank);

— ownership of the future cash flow (Genoese bank Banco di San Giorgio) [5].

These indicators were not widely used, however, by changing ownership and bank account records, they could replace cash. Considering that transactions related to goods and services, acting as payments, were carried out with the help of these instruments, amounts were transferred from one account to another.

2. The second institution included the classic issue banks, which issued paper money for circulation on the market and acted as the forerunners of modern banknotes.

Banks could change from one class to another, so, for example, the municipal bank of Vienna Stadtbank was originally conceived as a standard credit and deposit bank, and eventually developed into a full-fledged issuing bank [7].

The second institution became widespread only in the XIX century, and before that time most of the predecessors of Central Banks provided non-cash settlement services by transferring amounts from one account to another.

The very first Central Bank appeared in Switzerland in 1654 under the name Stockholms Banco. It was founded by Johan Palmstruch. The appearance of this bank was supposed to solve the problems of the Swiss monetary system. At that time, copper and bimetallic coins were common in this country, since it had extensive mines, and precious metals were in short supply, especially silver and gold, which flowed into the international center of the Middle Ages – Amsterdam. Due to the shortage of precious metals, Switzerland introduced a copper standard, which the authorities tried to spread by all means. In the occupied territories, it was prescribed to use copper money, and one of the Swiss conditions in the peace treaties in Europe was an agreement to stabilize the value of copper coins. Thus, the foundation of the first exchange bank in Switzerland allowed solving a number of problems, including the transaction costs of coin circulation.

The second Central Bank in terms of formation is the Bank of England, founded in 1694, and became the first issuing bank. He gave the Government of England a loan of 1.8 million pounds, and in return received the right to print money for the same amount [10]. Over time, the Bank of England began to increase its capital, and, accordingly, opportunities for the right to issue banknotes appeared. Thus, the privileges that the state gave him allowed him to gradually displace other banks and become a monopoly on the issue of banknotes.

The next Central Bank appeared in Scotland in 1695. However, it had significantly more restrictions than the Bank of England or the Bank of Switzerland. The Scottish Bank was limited only to issuing banknotes, that is, it was engaged in issuing money. However, formally it was a private bank, and other monetary organizations could issue banknotes besides it.

The next in chronology is the French Bank of Issue, which was established in 1800 by the directive of Napoleon Bonaparte. Initially, he had a small amount of powers, but they included the issue of money. However, as in the case of the Scottish Bank, this right was not a monopoly, since other banks could also make the issue. Initially, the Bank of France was founded as a joint-stock company, one of the founders of which was Napoleon Bonaparte. This move was made as a result of the fact that the public did not have confidence in paper money, so it was decided to form an institution that would be entrusted with the issue of money regardless of the state. As a result, a few years later, the Bank of France received the right to a monopoly issue.

In 1876, the German bank Reichsbank appeared. It was created after a series of events in German history, including the Franco-Prussian War, the political unification of Germany and the country’s transition to the gold standard in 1871. These events affected the German economy as a whole, and the prototype of the German bank was the Prussian Royal Bank, which in turn was based on the model of the bank of Hamburg.

In addition to the listed Central Banks, from a historical point of view, a number of sources mention a large number of other banks. In total, until the beginning of the XX century, more than 80 different banks were mentioned in history, similar in image and functionality to the Central Bank in its modern understanding.

It should be noted that the predecessors of Central Banks had many differences from modern ones and represented a united group of heterogeneous financial organizations. One of the first differences was that the Bank could not have significant amounts of government securities on its balance sheet. In addition, the predecessors of Central Banks often did not have control over the monetary base or did not have a monetary monopoly.

From the point of view of the impact on this monetary system as a whole and its further development, there are three key predecessors of modern Central banks:

1. Privately owned bank (Bank of England, Bank of France);
2. Bank owned by municipalities (Bank of Barcelona, Bank of Naples);
3. A bank owned by the state in the person of the King and his entourage (John Law Bank) [8].

However, despite all the differences, they were united by two important features – the ability and the right to generate a certain set of privileged financial requirements. On the basis of these two features, banks could create special monetary obligations that were privileged due to the fact that other private organizations could not reproduce financial requirements.

Such demands were made by a wide range of assets, including precious metals, in particular bullion, metal money, debt obligations, tax revenues of future periods, and debts from the government of the country. At the same time, it is important to note that such financial requirements carried certain risks, and also had low liquidity.

In turn, the designated features of the first Central Banks allowed them to change such risky assets into highly liquid ones, while maintaining monetary obligations to customers [3]. At the same time, the stability of these processes was maintained by observing coercive measures in the form of a direct requirement for customers to pay through the Bank, or to make payments using its banknotes.

The activities of the first banks were often complicated due to fears, and sometimes panic of depositors, which led to prolonged convertibility of obligations or complete liquidation of the organization. From history, the most prominent well-known examples that faced similar problems of the predecessors of Central Banks are the Bank of San Giorgio, the Bank of Barcelona, the Bank of Stockholm, the Bank of Hamburg, etc.

Banks had similar problems for several reasons. The first of them is the lack of political support from all government institutions (King, Government, Councils, etc.). The second reason was the lack of trust of the local business community, that is, if the bank did not provide obvious advantages over other alternatives, the nobles and merchants preferred their competitors, thereby leaving banks without savings, savings and working capital of users [4].

Another reason for the low stability of the credit and monetary organizations under consideration was the insufficient development of commercial banking, which functioned at a relatively high level compared to other countries only in England and Wales. In the rest of Europe, distrust of banks persisted for quite a long period of time.

Initially, the clients of the predecessors of Central Banks were mostly only wealthy citizens. However, over time, these trends were reversed and confidence in these organizations began to increase, which increased the number of customers, which contributed to ensuring the financial stability of banks. As a result, the ability of such organizations to manage their assets and liabilities began to increase. However, there was a downside to this process. Along with the spread of banknote circulation, the number of attempts to use the Central Bank and its resources as a means of solving the fiscal problems of the state and the insolvency of the financial policy directly affecting the citizens of the country has increased [2].

Summing up, it should be noted that the first Central Banks appeared in two main ways – due to the initial existence of a commercial bank, gradually transforming into a Central One, or during its purposeful creation. The key reasons for these processes were the need to concentrate and centralize capital using a single national monetary system and the creation of a central issuing center, as well as the importance of creating a state bank.

Thus, it can be concluded that modern Central Banks have inherited some of the features of their predecessors. Based on historical experience and analysis of the processes of transformation of monetary systems, today such organizations have the opportunity to eliminate in their structure and take into account the causes of heterogeneous problems, including, for example, the lack of political support and trust of local business communities.