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The Rise and Decline of The Medici Bank
The Rise & Decline of The Medici Bank, 1397-1494
The roots of modern capitalism go back to the Italian banking system of the late Middle Ages and the Renaissance. In the fifteenth century, the Medici Bank succeeded in overshadowing its competitors, the Bardi and the Peruzzi, who were the giants of the fourteenth century, and grew into a vast establishment with branches in most of the large cities of Western Europe. A study of its operations is essential to an understanding of the economic conditions in Europe in the fifteenth century. From a careful study of pertinent documents, including a set of libri segreti (confidential ledgers) discovered in 1950, Professor de Roover has reconstructed the details of the bank's organization and operating methods; its loan policies, which reflected the Church's doctrine on usury; its trading and industrial investments; its roles within the Florentine gild system and tax structure; and its activities as financial agent of the Church. He covers every aspect of the bank's history, from its early years under the management of Giovanni di Bicci de' Medici to its collapse with the expulsion of the Medici from Florence.
500 pages, Paperback
First published January 1, 1963
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December 3, 2025
Raymond de Roover Studies The Rise And Fall Of The Famed Medici Bank Of Florence, During The Period Ranging From 1397-1494.
The Medici Bank of Florence ranked among Europe's most powerful financial institutions during the Italian Late Middle Age and early Renaissance periods, earning its place next to the Fuggers of Augsburg, Genoa's Casa di San Giorgio, and the Ricciardi bank of Lucca. It flourished under Giovanni di Bicci de'Medici, dominated the economic landscape under Cosimo Pater Patriae and his sons, Piero de'Medici and Giovanni di Cosimo, and was subsequently brought to ruin under Lorenzo the Magnificent and his heir, Piero the Unfortunate. Florence and the Medici were not, however, always placed at the forefront of Italian political and financial affairs. During the Italian Duecento, or thirteenth century, the preeminent banking establishment on the peninsula was the Gran Tavola (great table, or bank) of Orlando Buonsignori, a wealthy Sienese financier whose firm failed in 1298, with Florence afterward assuming Siena's former position as Italy's foremost banking city.
"The Medici are well known in history because of the prominent rôle they played in the Italian Renaissance as political figures or as patrons of letters and fine arts. However, their activity as bankers and traders did not attract the same degree of attention. Yet, it was economic power that made it possible for the Medici to seize political power and that also provided the financial resources which enabled them to commission artists, to promote humanism, to collect a unique and magnificent library..and to spend huge amounts on monumental buildings..The Medici, from Giovanni di Bicci down, were not of the middle class, as some sociological historians have held, since the tax records show that they were by far the richest family in the entire city of Florence and occupied the upper rung of the social ladder." These passages from the introductory chapter of Raymond de Roover's The Rise and Decline of the Medici Bank, 1397-1494 speak loudly in favor of the Medici clan's indominable economic aspirations, their genius for generating revenue, and their ability to transcend their own mercantile social status and stand amongst kings and queens.
The Medici certainly had their share of competition in Florence, however, coming in the form of powerful rival banking clans, most notably the Bardi, Peruzzi and Acciaiuoli - who, between them, effectively dominated Florentine financial affairs during the first half of the fourteenth century. The onset of the Black Death in 1347 led to these three families' banking "companies", as they were known, collapsing, due to a number of factors which, according to de Roover, were "..probably caused by overextension of credit and excessive loans to sovereigns, especially to Edward III (reigned 1327-1377), King of England, and to Robert (1309-1343), the Angevin King of Naples." Their downfall set the stage for the Medici's hegemonic rise to become the most prestigious European banking house of the Italian Quattrocento, allowing them to enter politics where they became Grand Dukes of Tuscany and produced two Catholic Popes, before marrying into the Royal House of France.
This digitally-printed trade paperback edition of Professor Raymond de Roover's The Rise and Decline of the Medici Bank, 1397-1494 was first published in 1963, but released as part of the Norton Library in 1966 by W.W. Norton & Company, Inc., and its 375-page main text is accompanied by a host of supplementary materials which include twelve photos of Medici artwork and sculpture, numerous charts, figures, graphs and numerical statistics accompanying the text, appendices containing names of the Medici's general and branch managers, and a short list of relevant historical events occurring during 1397-1404. There are also 75 pages of additional notes, a 17-page bibliography and an index at the back of the volume.
In Chapter 2, The Medici Bank and its Institutional Background, de Roover discusses the different ways that medieval and Renaissance banking companies would be constrained by church protocol to circumvent the usury doctrine, which prohibited the collection of interest resulting from financial transactions. The Medici and other banking firms had to be very inventive in how they conducted their respective businesses to comply with these regulations and remain on the correct side of ecclesiastical policies, hopefully avoiding being labeled as usurers by the Catholic Church.
The primary method they utilized to achieve this was through a process known as a four-party exchange. Although there were variations to the number and role of the involved parties, the exchange was the Late Middle Age or Renaissance equivalent to the traditional 'loan', in the sense that modern society is familiar with it. It was a complex, circuitous transaction that could not be conducted in the normal manner, using the same monetary unit with interest tacked onto the principal amount. The interest rate had to be incorporated into an exchange fee that was charged when money changed hands between two currencies, and was written up onto a bill of exchange.
Once initiated, a standard bill of exchange took a predetermined amount of time to mature, after which the transaction could be concluded, and it had four parties. The process began in a particular city, and, using one form of currency, the deliverer, also called the remitter, would buy a bill of exchange from the taker, or drawer, at a fluctuating exchange rate, which completed the first portion of the deal. There was then an intervening period, usually one to three months, when the bill matured, after which the next part of the exchange could be undertaken. The second half of the process was conducted in the second city, using the second form of currency, and involved a payor, or drawee (usually an associate of the taker, or drawer) accepting and paying the bill upon maturity, and then, for the final part of the transaction, the payee, or beneficiary (who was generally associated with the deliverer, or remitter), would collect the bill in the deliverer's name. Afterward, an inverse process would occur using another four-party bill of exchange, with a new exchange rate and an additional one-to-three-month period, after which the second form of currency was converted back to the original, and with any luck the two exchange rates would work out to accrue the original deliverer a greater amount of capital than he had invested at the beginning.
While the reviewer is by no stretch of the imagination a financial expert, he nonetheless had a wonderful time working through Raymond de Roover's technical analyses concerning the ins and outs of Medici banking, reading with rapt attention as the economic historian's thoughtful prose explained these complicated concepts with relative ease, utilizing helpful diagrams and hypothetical examples that rendered them much, much easier to understand. The exchange procedure just described uses a transparent four-party model, meaning that the parties can be substituted, rearranged or combined to accommodate many different kinds of transactions, but de Roover does not dwell overmuch on this procedural aspect of the story he tells.
First instituted in 1423, the Florentine castato was a tax on real estate and investments that was normally levied once or twice a year, but during times of emergency it could be collected more frequently. It originally came into being during a period when the monte comune had grown so large as to be unmanageable, and Florence became increasingly involved in costly wars with other Italian city-states such as Lucca and Milan. The monte comune, or public fund, was a concept that had developed over a period of 2-3 years following the short reign of Walter of Brienne, who had "..found himself in such desperate straits that he cancelled all assignments in order to have the tax money flow into the public treasury instead of into the pockets of the state creditors." This government debt was rolled into a massive public debt, the monte comune, which was then bought into by wealthy private citizens, who provided the Florentine government with instant capital, and in return were paid interest, with their profits increasing according to how many shares they had purchased.
Professor de Roover has amazingly provided data from none other than Cosimo de'Medici's tax receipt for the 1457 castato, in which he and his nephew Pierfranceso report their total assets to be 122,669 florins for that year, including Cosimo's sizeable real estate holdings (59,741 florins) and his stock in the monte comune (8,569 florins). These are weighted against his 7,499 florins in total deductions, which include the administrative expense for his real estate, his 120 pairs of oxen and the cost of feeding his 14 family members. After deductions, the new sum for Cosimo's total taxable wealth, called the sovrabbondante, drops to 115,170 florins. Finally, the castato itself was calculated as one-half percent of the sovrabbondante, leaving Cosimo owing 576 florins.
Giovanni di Bicci de'Medici, from whom the family's senior Cafaggiolo and junior Popolani branches originated, started his banking career in 1385 as a junior partner, working at the Roman branch of a Florence-based banking and trade company owned by his distant cousin, Vieri de'Medici, called "Vieri di Cambio de'Medici & Co.". Vieri was a banker first and foremost, but throughout the course of his forty-year career he had slowly expanded his firm to encompass other aspects of business, and upon his retirement in 1393, he divided his enterprise into three portions, entrusting them to his son, his nephew, and Giovanni di Bicci de'Medici. Vieri di Cambrio de'Medici's banking firm and numerous other topics related to how Giovanni di Bicci de'Medici came to control what became the most powerful financial institution in Europe, are explored in greater depth in Chapter 3, The Antecedents and the Early Years of the Medici Bank Under the Management of Giovanni di Bicci, 1397-1429.
On two separate occasions, first at Ancona and then in Milan, the Medici opened bank branches specifically to accommodate the financial needs of the powerful condottiere-turned-lord, Francesco Sforza. The Ancona branch was ostensibly established to take advantage of the port city's increased Apulian and Levantine port traffic, but according to one historian, Frederick Gaupp, it was actually opened to fund Sforza's military campaigns in the Anconetana. The theory posited by Gaupp is very convincing, especially upon reading de Roover's data, "..since the total invested by all partners together was 20,000 ducats, a suspiciously large amount for a firm doing business in such a small trading center as Ancona." The author also observes that Francesco's name appeared on the trading contract, as "the Magnificent Count Sforza".
In Milan, Cosimo de'Medici made the decision to hedge his bets, so to speak, and preserve the Peace of Lodi's delicate balance of power by opening a Milanese branch, which would help Sforza consolidate his relatively new government (1450), by exclusively allowing him access to large amounts of funds and prevent the city from falling to the Venetians. The Ancona and Milan branches were opened respectively in 1436 and 1459, at different periods in Sforza's professional career, but they signified an enduring alliance between two powerful Italian families, both of whom contributed greatly to Italian stability during the latter half of the fifteenth century.
In Chapter 4, The Heyday of the Medici Bank: Cosimo at the Helm, 1429-1464, de Roover explains how, after the death of Giovanni di Bicci in 1429, the bank enjoyed its most prosperous period while under the partnership of his two sons, Cosimo, and Lorenzo de'Medici (Lorenzo the Elder), and expanded to form multiple branches not only within Italy but also abroad. Cosimo in particular possessed a very business-oriented mind and developed an astute sense of character judgment, leading to a succession of shrewd management decisions to appoint intelligent, capable men at his branches' leadership positions. "With Cosimo at the helm, the Medici Bank became the largest banking house of its time. Cosimo did not try to manage everything. On the contrary, instead of becoming submerged in detail, he understood how to delegate power while holding the reins of his team with a firm hand. Throughout his career, it was he who laid down the law, formulated policies, and saw to it that his instructions were obeyed to the letter."
The business-savvy Medici eventually expanded their profitable banking firm to include other businesses and trades, opening two woolshops, which from 1397-1420 generated approximately 8,472 florins, 5.5 percent of total Medici profits for that period, and a lucrative silkshop that, as of November 1, 1441, had a working capital, called a corpo, of 4,200 florins with a surplus, called a soppracorpo, of 3,120 florins, and succeeded in large part due to its skilled manager, Francesco Berlinghieri. The Medici also trafficked in alum, working with Pope Pius II to become the exclusive partner in a Papal mining contract that permitted them to extract the precious mineral from the alum mine in the Italian city of Tolfa, near Citavecchia, upon its discovery in 1470. This effectually made the Medici the most reliable alum procurer in Europe during that period.
Professor de Roover explores the bank's organizational structure, analyzes management and staffing at its numerous branches, and discusses more specialized topics such as its written correspondence and accounting procedures, in Chapter 5, The Legal Status and Economic Structure of the Medici Bank. The bank's full-time personnel comprised three kinds of workers - fattori, or factors, were employees who could be bound to a banking firm by a notarial contract, and if they were outstanding at their jobs, fattori could receive bonuses and additional income, but they were not eligible for profit sharing; and compagno, or partners, who were privileged employees affiliated with the bank through partnership agreements, through the terms of which they shared in the profits along with the maggiore, or senior partners, a reserved position for major shareholders. The Medici were considered members of the maggiore.
Chapter 7, The Medici as Merchants and as Dealers in Iron and Alum introduces several enterprises the Medici engaged in to generate additional revenue, such as venture trading, underwriting, and mining in alum and iron. When a firm decided to invest capital into selling a specialized, high-risk commodity, the practice was known as venture trading, or "adventuring". These were one-time consignments on rare items such as exotic foods and spices, Latin manuscripts, and woven tapestries, and they ran a high risk of failure, either due to the agent's dishonesty or his inability to sell through his complete stock. The bank's diverse portfolio even included the occasional underwriting of ships carrying expensive or high-volume cargoes, to help safeguard investors against the risks associated with losing the merchandise to a shipwreck in a long sea voyage. The Venice branch generally functioned as the insurance hub for the rest of the company, as it possessed the sufficient capital to negotiate policies for the other branches.
In Chapters 9-13, Professor de Roover limns what are perhaps the most compelling portions of his study - the engaging individual chronicles of the Medici Bank's numerous branches. Each location's story is an economic narrative possessing its own unique appeal - the Rome branch was administered without any initial working capital - the Catholic Church and its Pope performed gigantic deposits that provided all the money it would ever need, and "Up to 1435, it produced more than 50 percent of the bank's aggregate earnings." The Florentine branch was known as the Tavola, and its members were required to register in the city's money-changers gild, the Arte del Cambio. This branch mostly dealt in banking, imports and exports, and bills of exchange, and it survived with a low reserve of ready capital due to its close proximity to the Medici central office.
The Venice branch opened in 1402 under the leadership of Neri di Cipriano Tornaquinci, and it experienced an odious beginning, "..when it was discovered that Neri had been reporting fictitious profits and that there actually was a loss. He also reported profits for the next three years (1403-1405), but these were never credited to the partners' accounts. As Neri's doings aroused suspicion, an investigation was made, and all sorts of frauds were uncovered." Although the Medici did seek reparations against Neri in the Florence's mercantile court, the Sei della Mercanzia, Giovanni di Bicci later took pity on him, sending him 36 florins while he was living in a state of poverty in Cracow, Poland. There are also sections exploring the fascinating stories of the branches in Naples, Milan, Pisa, Geneva, Lyons, Avignon, Bruges and London. Chapter 14, The Decline: 1464-1494 chronicles the bank's waning years during Francesco Sassetti's disastrous tenure as manager, as well as the financial impact of the Florentine bank crash of 1464 and the Pazzi Conspiracy of 1478.
Raymond de Roover's The Rise and Decline of the Medici Bank, 1397-1494 is an outstanding financial study on the most powerful banking family of the Italian Quattrocento, and an exceptional work of modern twentieth-century scholarship that has yet to be equaled. Taking into account the fact that the book was written over sixty years ago, and that in the reviewer's opinion, its subject matter likely falls into the upper tier of intermediate-to-advanced, the author's chosen prose style is remarkably easy to read, rendering its difficulty level not as intimidating as it may at first appear, and its enjoyment level higher than one might expect. I believe that any reader could undertake this book, learn a tremendous amount from it, and also enjoy it immensely in the bargain. Thank you so much for reading, I hope that you enjoyed the review!
The Medici Bank of Florence ranked among Europe's most powerful financial institutions during the Italian Late Middle Age and early Renaissance periods, earning its place next to the Fuggers of Augsburg, Genoa's Casa di San Giorgio, and the Ricciardi bank of Lucca. It flourished under Giovanni di Bicci de'Medici, dominated the economic landscape under Cosimo Pater Patriae and his sons, Piero de'Medici and Giovanni di Cosimo, and was subsequently brought to ruin under Lorenzo the Magnificent and his heir, Piero the Unfortunate. Florence and the Medici were not, however, always placed at the forefront of Italian political and financial affairs. During the Italian Duecento, or thirteenth century, the preeminent banking establishment on the peninsula was the Gran Tavola (great table, or bank) of Orlando Buonsignori, a wealthy Sienese financier whose firm failed in 1298, with Florence afterward assuming Siena's former position as Italy's foremost banking city.
"The Medici are well known in history because of the prominent rôle they played in the Italian Renaissance as political figures or as patrons of letters and fine arts. However, their activity as bankers and traders did not attract the same degree of attention. Yet, it was economic power that made it possible for the Medici to seize political power and that also provided the financial resources which enabled them to commission artists, to promote humanism, to collect a unique and magnificent library..and to spend huge amounts on monumental buildings..The Medici, from Giovanni di Bicci down, were not of the middle class, as some sociological historians have held, since the tax records show that they were by far the richest family in the entire city of Florence and occupied the upper rung of the social ladder." These passages from the introductory chapter of Raymond de Roover's The Rise and Decline of the Medici Bank, 1397-1494 speak loudly in favor of the Medici clan's indominable economic aspirations, their genius for generating revenue, and their ability to transcend their own mercantile social status and stand amongst kings and queens.
The Medici certainly had their share of competition in Florence, however, coming in the form of powerful rival banking clans, most notably the Bardi, Peruzzi and Acciaiuoli - who, between them, effectively dominated Florentine financial affairs during the first half of the fourteenth century. The onset of the Black Death in 1347 led to these three families' banking "companies", as they were known, collapsing, due to a number of factors which, according to de Roover, were "..probably caused by overextension of credit and excessive loans to sovereigns, especially to Edward III (reigned 1327-1377), King of England, and to Robert (1309-1343), the Angevin King of Naples." Their downfall set the stage for the Medici's hegemonic rise to become the most prestigious European banking house of the Italian Quattrocento, allowing them to enter politics where they became Grand Dukes of Tuscany and produced two Catholic Popes, before marrying into the Royal House of France.
This digitally-printed trade paperback edition of Professor Raymond de Roover's The Rise and Decline of the Medici Bank, 1397-1494 was first published in 1963, but released as part of the Norton Library in 1966 by W.W. Norton & Company, Inc., and its 375-page main text is accompanied by a host of supplementary materials which include twelve photos of Medici artwork and sculpture, numerous charts, figures, graphs and numerical statistics accompanying the text, appendices containing names of the Medici's general and branch managers, and a short list of relevant historical events occurring during 1397-1404. There are also 75 pages of additional notes, a 17-page bibliography and an index at the back of the volume.
In Chapter 2, The Medici Bank and its Institutional Background, de Roover discusses the different ways that medieval and Renaissance banking companies would be constrained by church protocol to circumvent the usury doctrine, which prohibited the collection of interest resulting from financial transactions. The Medici and other banking firms had to be very inventive in how they conducted their respective businesses to comply with these regulations and remain on the correct side of ecclesiastical policies, hopefully avoiding being labeled as usurers by the Catholic Church.
The primary method they utilized to achieve this was through a process known as a four-party exchange. Although there were variations to the number and role of the involved parties, the exchange was the Late Middle Age or Renaissance equivalent to the traditional 'loan', in the sense that modern society is familiar with it. It was a complex, circuitous transaction that could not be conducted in the normal manner, using the same monetary unit with interest tacked onto the principal amount. The interest rate had to be incorporated into an exchange fee that was charged when money changed hands between two currencies, and was written up onto a bill of exchange.
Once initiated, a standard bill of exchange took a predetermined amount of time to mature, after which the transaction could be concluded, and it had four parties. The process began in a particular city, and, using one form of currency, the deliverer, also called the remitter, would buy a bill of exchange from the taker, or drawer, at a fluctuating exchange rate, which completed the first portion of the deal. There was then an intervening period, usually one to three months, when the bill matured, after which the next part of the exchange could be undertaken. The second half of the process was conducted in the second city, using the second form of currency, and involved a payor, or drawee (usually an associate of the taker, or drawer) accepting and paying the bill upon maturity, and then, for the final part of the transaction, the payee, or beneficiary (who was generally associated with the deliverer, or remitter), would collect the bill in the deliverer's name. Afterward, an inverse process would occur using another four-party bill of exchange, with a new exchange rate and an additional one-to-three-month period, after which the second form of currency was converted back to the original, and with any luck the two exchange rates would work out to accrue the original deliverer a greater amount of capital than he had invested at the beginning.
While the reviewer is by no stretch of the imagination a financial expert, he nonetheless had a wonderful time working through Raymond de Roover's technical analyses concerning the ins and outs of Medici banking, reading with rapt attention as the economic historian's thoughtful prose explained these complicated concepts with relative ease, utilizing helpful diagrams and hypothetical examples that rendered them much, much easier to understand. The exchange procedure just described uses a transparent four-party model, meaning that the parties can be substituted, rearranged or combined to accommodate many different kinds of transactions, but de Roover does not dwell overmuch on this procedural aspect of the story he tells.
First instituted in 1423, the Florentine castato was a tax on real estate and investments that was normally levied once or twice a year, but during times of emergency it could be collected more frequently. It originally came into being during a period when the monte comune had grown so large as to be unmanageable, and Florence became increasingly involved in costly wars with other Italian city-states such as Lucca and Milan. The monte comune, or public fund, was a concept that had developed over a period of 2-3 years following the short reign of Walter of Brienne, who had "..found himself in such desperate straits that he cancelled all assignments in order to have the tax money flow into the public treasury instead of into the pockets of the state creditors." This government debt was rolled into a massive public debt, the monte comune, which was then bought into by wealthy private citizens, who provided the Florentine government with instant capital, and in return were paid interest, with their profits increasing according to how many shares they had purchased.
Professor de Roover has amazingly provided data from none other than Cosimo de'Medici's tax receipt for the 1457 castato, in which he and his nephew Pierfranceso report their total assets to be 122,669 florins for that year, including Cosimo's sizeable real estate holdings (59,741 florins) and his stock in the monte comune (8,569 florins). These are weighted against his 7,499 florins in total deductions, which include the administrative expense for his real estate, his 120 pairs of oxen and the cost of feeding his 14 family members. After deductions, the new sum for Cosimo's total taxable wealth, called the sovrabbondante, drops to 115,170 florins. Finally, the castato itself was calculated as one-half percent of the sovrabbondante, leaving Cosimo owing 576 florins.
Giovanni di Bicci de'Medici, from whom the family's senior Cafaggiolo and junior Popolani branches originated, started his banking career in 1385 as a junior partner, working at the Roman branch of a Florence-based banking and trade company owned by his distant cousin, Vieri de'Medici, called "Vieri di Cambio de'Medici & Co.". Vieri was a banker first and foremost, but throughout the course of his forty-year career he had slowly expanded his firm to encompass other aspects of business, and upon his retirement in 1393, he divided his enterprise into three portions, entrusting them to his son, his nephew, and Giovanni di Bicci de'Medici. Vieri di Cambrio de'Medici's banking firm and numerous other topics related to how Giovanni di Bicci de'Medici came to control what became the most powerful financial institution in Europe, are explored in greater depth in Chapter 3, The Antecedents and the Early Years of the Medici Bank Under the Management of Giovanni di Bicci, 1397-1429.
On two separate occasions, first at Ancona and then in Milan, the Medici opened bank branches specifically to accommodate the financial needs of the powerful condottiere-turned-lord, Francesco Sforza. The Ancona branch was ostensibly established to take advantage of the port city's increased Apulian and Levantine port traffic, but according to one historian, Frederick Gaupp, it was actually opened to fund Sforza's military campaigns in the Anconetana. The theory posited by Gaupp is very convincing, especially upon reading de Roover's data, "..since the total invested by all partners together was 20,000 ducats, a suspiciously large amount for a firm doing business in such a small trading center as Ancona." The author also observes that Francesco's name appeared on the trading contract, as "the Magnificent Count Sforza".
In Milan, Cosimo de'Medici made the decision to hedge his bets, so to speak, and preserve the Peace of Lodi's delicate balance of power by opening a Milanese branch, which would help Sforza consolidate his relatively new government (1450), by exclusively allowing him access to large amounts of funds and prevent the city from falling to the Venetians. The Ancona and Milan branches were opened respectively in 1436 and 1459, at different periods in Sforza's professional career, but they signified an enduring alliance between two powerful Italian families, both of whom contributed greatly to Italian stability during the latter half of the fifteenth century.
In Chapter 4, The Heyday of the Medici Bank: Cosimo at the Helm, 1429-1464, de Roover explains how, after the death of Giovanni di Bicci in 1429, the bank enjoyed its most prosperous period while under the partnership of his two sons, Cosimo, and Lorenzo de'Medici (Lorenzo the Elder), and expanded to form multiple branches not only within Italy but also abroad. Cosimo in particular possessed a very business-oriented mind and developed an astute sense of character judgment, leading to a succession of shrewd management decisions to appoint intelligent, capable men at his branches' leadership positions. "With Cosimo at the helm, the Medici Bank became the largest banking house of its time. Cosimo did not try to manage everything. On the contrary, instead of becoming submerged in detail, he understood how to delegate power while holding the reins of his team with a firm hand. Throughout his career, it was he who laid down the law, formulated policies, and saw to it that his instructions were obeyed to the letter."
The business-savvy Medici eventually expanded their profitable banking firm to include other businesses and trades, opening two woolshops, which from 1397-1420 generated approximately 8,472 florins, 5.5 percent of total Medici profits for that period, and a lucrative silkshop that, as of November 1, 1441, had a working capital, called a corpo, of 4,200 florins with a surplus, called a soppracorpo, of 3,120 florins, and succeeded in large part due to its skilled manager, Francesco Berlinghieri. The Medici also trafficked in alum, working with Pope Pius II to become the exclusive partner in a Papal mining contract that permitted them to extract the precious mineral from the alum mine in the Italian city of Tolfa, near Citavecchia, upon its discovery in 1470. This effectually made the Medici the most reliable alum procurer in Europe during that period.
Professor de Roover explores the bank's organizational structure, analyzes management and staffing at its numerous branches, and discusses more specialized topics such as its written correspondence and accounting procedures, in Chapter 5, The Legal Status and Economic Structure of the Medici Bank. The bank's full-time personnel comprised three kinds of workers - fattori, or factors, were employees who could be bound to a banking firm by a notarial contract, and if they were outstanding at their jobs, fattori could receive bonuses and additional income, but they were not eligible for profit sharing; and compagno, or partners, who were privileged employees affiliated with the bank through partnership agreements, through the terms of which they shared in the profits along with the maggiore, or senior partners, a reserved position for major shareholders. The Medici were considered members of the maggiore.
Chapter 7, The Medici as Merchants and as Dealers in Iron and Alum introduces several enterprises the Medici engaged in to generate additional revenue, such as venture trading, underwriting, and mining in alum and iron. When a firm decided to invest capital into selling a specialized, high-risk commodity, the practice was known as venture trading, or "adventuring". These were one-time consignments on rare items such as exotic foods and spices, Latin manuscripts, and woven tapestries, and they ran a high risk of failure, either due to the agent's dishonesty or his inability to sell through his complete stock. The bank's diverse portfolio even included the occasional underwriting of ships carrying expensive or high-volume cargoes, to help safeguard investors against the risks associated with losing the merchandise to a shipwreck in a long sea voyage. The Venice branch generally functioned as the insurance hub for the rest of the company, as it possessed the sufficient capital to negotiate policies for the other branches.
In Chapters 9-13, Professor de Roover limns what are perhaps the most compelling portions of his study - the engaging individual chronicles of the Medici Bank's numerous branches. Each location's story is an economic narrative possessing its own unique appeal - the Rome branch was administered without any initial working capital - the Catholic Church and its Pope performed gigantic deposits that provided all the money it would ever need, and "Up to 1435, it produced more than 50 percent of the bank's aggregate earnings." The Florentine branch was known as the Tavola, and its members were required to register in the city's money-changers gild, the Arte del Cambio. This branch mostly dealt in banking, imports and exports, and bills of exchange, and it survived with a low reserve of ready capital due to its close proximity to the Medici central office.
The Venice branch opened in 1402 under the leadership of Neri di Cipriano Tornaquinci, and it experienced an odious beginning, "..when it was discovered that Neri had been reporting fictitious profits and that there actually was a loss. He also reported profits for the next three years (1403-1405), but these were never credited to the partners' accounts. As Neri's doings aroused suspicion, an investigation was made, and all sorts of frauds were uncovered." Although the Medici did seek reparations against Neri in the Florence's mercantile court, the Sei della Mercanzia, Giovanni di Bicci later took pity on him, sending him 36 florins while he was living in a state of poverty in Cracow, Poland. There are also sections exploring the fascinating stories of the branches in Naples, Milan, Pisa, Geneva, Lyons, Avignon, Bruges and London. Chapter 14, The Decline: 1464-1494 chronicles the bank's waning years during Francesco Sassetti's disastrous tenure as manager, as well as the financial impact of the Florentine bank crash of 1464 and the Pazzi Conspiracy of 1478.
Raymond de Roover's The Rise and Decline of the Medici Bank, 1397-1494 is an outstanding financial study on the most powerful banking family of the Italian Quattrocento, and an exceptional work of modern twentieth-century scholarship that has yet to be equaled. Taking into account the fact that the book was written over sixty years ago, and that in the reviewer's opinion, its subject matter likely falls into the upper tier of intermediate-to-advanced, the author's chosen prose style is remarkably easy to read, rendering its difficulty level not as intimidating as it may at first appear, and its enjoyment level higher than one might expect. I believe that any reader could undertake this book, learn a tremendous amount from it, and also enjoy it immensely in the bargain. Thank you so much for reading, I hope that you enjoyed the review!
March 8, 2023
又消滅一本閱讀器藏書啦
有會計專才的歷史學家似乎很少
大概是當會計師好賺多了吧
像作者這種有會計師資格的歷史學者
應該是挺少見的特例
但該怎麼評價本書呢....
只能說，有些書真的是不能當閒書隨便讀的Orzz
本書可以看得出體例嚴謹立論精密
但對只修過管院大一必修經原的我來說
實在太天書了
開篇介紹金融會計原理還有中世貨幣制度我就已經不行了
接著講中世紀金融運作，各分行運作史
各種術語報表和數字我都有看沒懂
(中世紀人為什麼都不用十進位?光金額換算我就昏頭了)
經濟會計學小白如我看完全書
只學到對貴族放款是很危險低
老爺們傾向是借錢不還賴皮到底
最後壞帳連環爆，銀行就倒店了
另外就是任用專業經理人是很重要的
"國父"科西莫除了自己的才能外
也謹慎選用有才能的經理
到了孫子豪奢的羅倫佐
自己沒有金融知識就算了，還用了一堆只想偷雞摸狗的庸才
再加上大環境不景氣，梅迪奇銀行就垮到底了
倒是覺得這本書很適合讓管理學院各系所來看
書中提到的金融原理，對管院學生來說應該都是小菜一碟吧~
我就...給個中庸的三星評價吧
有會計專才的歷史學家似乎很少
大概是當會計師好賺多了吧
像作者這種有會計師資格的歷史學者
應該是挺少見的特例
但該怎麼評價本書呢....
只能說，有些書真的是不能當閒書隨便讀的Orzz
本書可以看得出體例嚴謹立論精密
但對只修過管院大一必修經原的我來說
實在太天書了
開篇介紹金融會計原理還有中世貨幣制度我就已經不行了
接著講中世紀金融運作，各分行運作史
各種術語報表和數字我都有看沒懂
(中世紀人為什麼都不用十進位?光金額換算我就昏頭了)
經濟會計學小白如我看完全書
只學到對貴族放款是很危險低
老爺們傾向是借錢不還賴皮到底
最後壞帳連環爆，銀行就倒店了
另外就是任用專業經理人是很重要的
"國父"科西莫除了自己的才能外
也謹慎選用有才能的經理
到了孫子豪奢的羅倫佐
自己沒有金融知識就算了，還用了一堆只想偷雞摸狗的庸才
再加上大環境不景氣，梅迪奇銀行就垮到底了
倒是覺得這本書很適合讓管理學院各系所來看
書中提到的金融原理，對管院學生來說應該都是小菜一碟吧~
我就...給個中庸的三星評價吧
January 8, 2025
Väldigt spännande genomgång, och väldigt datarik.
December 24, 2018
A classic work on the Medici Bank. Not an easy read but well researched...
March 9, 2025
If you want to study business, take advice from Cosimo instead of Lorenzo.
October 6, 2025
I was given this book, because I owned a copy of Robert Sapolsky’s. Why Zebra’s don’t get Ulcers.
February 3, 2014
This is a great description of the origins of commerce and banking as we know them. The Medici Bank was headquartered in Florence, Italy, and had branches all over Europe. It has interesting implications for banking centralization and decentralization and I used it as required reading when I used to take student groups to Italy. It is well-referenced and fairly readable for those of us interested in the topic.
May 10, 2016
A comprehensive narrative and economic analysis of the Medici Bank. de Roover is second to none in his approach to economic history and presents a wealth of data to support his argument.
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