Merchant banking consisted initially of
merchants who assisted in financing the transactions of other merchants in
addition to their own trade. In France, during seventeenth and eighteenth
centuries a merchant banker was not merely a trader but an entrepreneur par excellence.
He invested his accumulated profits in all kinds of promising activities. He
added banking business to his merchant activities and became a merchant banker.
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The Italian merchant bankers introduced into England not only the bill of exchange but also all the institutions and techniques connected with an organised money market.