The Medicis were the wealthiest family in Europe and perhaps the world.
Founding[ edit ] The Medici family had long been involved in banking at a high level, maintaining their status as a respectably upper-class and notably wealthy family who derived their money from land holdings in the Mugello region towards the Apenninesnorth of Florence.
The Medicis were not only bankers but innovators in financial accounting. At one point, the Medicis managed most of the great fortunes in the European world, from members of royalty to merchants. There was even a time when the currency issued by the Medicis, the florinwas accepted and used throughout Europe as the preferred Medici bank to conduct business, commerce and trade.
A distant cousin, Vieri di Cambio —however, was one of Florence's more prominent bankers the first of the various modestly upper-class Medici lineages, numbering around 20 in . His banking house trained and employed Giovanni and his elder brother Francesco c. Francesco became a junior partner inwhile Giovanni rose to become general manager of the Rome branch inwhich was incorporated as a partnership, though it was not necessary to capitalize that branch because the Church was usually depositing funds and not borrowing.
One bank failed quickly. The second, managed by Francesco and later his son, survived untila little less than a decade after Averardo's death.
The third bank was controlled by Giovanni in partnership with Benedetto di Lippaccio de' Bardi — . The branch in Rome was entrusted to Benedetto, and Giovanni took on Gentile di Baldassarre Buoni — Medici bank a partner. They raised 10, gold florins and began operating in Florence, though Gentile soon left the firm.
This move had certain advantages for a bank, inasmuch as the predominant large banks of the 14th century which were based in Florence—the Bardi, Acciaioli, Peruzzi—had met with problems, and saw their places usurped by the Albertiwho were just large enough to capture the Catholic Church 's business.
But the Alberti firm split over internecine quarrels, and the clan was banished from Florence in though they would be allowed to return increating yet another void. Giovanni's choice proved to be prescient, especially since what Florence was lacking was a good port on the Mediterranean —which it would obtain in with the conquest of Pisa and its Porto Pisano.
Rise[ edit ] A factor was dispatched to Venice to seek out investment opportunities. He did well and on March 25,the third branch of the Medici bank was opened. It suffered from some initial mismanagement by the factor who had previously done so well—he made the fatal mistake of violating the partnership agreement and loaning money to Germans; on a more humane note, he would eventually become a pauper and be sent 20 florins by Giovanni, who felt that a past partner deserved some charitybut soon was prospering.
It was this branch that established the practice of having a general manager's remuneration be paid through shares in the branch that he purchased with his investment. By this point, the Rome branch had established a branch in Naples closed in and was replaced with one in Geneva  and Gaeta.
It may seem that the Medici bank was flourishing and rapidly expanding its assets across Italy, but nevertheless there were perhaps only 17 employees in total of the bank inwith only five at the central bank in Florence, although they were reasonably well-paid and promotions seem to have been rapid when warranted such as in the case of Giuliano di Giovanni di ser Matteo, who went from being a clerk in to a junior partner in He dissolved one of the wool factories, along with other reorganizations occasioned by partnerships coming to their designated end.
This date is interesting because Ilarione's contract with his principal was done in the name of Cosimo and Lorenzo, and not their father Giovanni; this perhaps marks the beginnings of a transfer of responsibility and power in the Medici bank from one generation to the next.
Cosimo de' Medici Giovanni died in According to Lorenzo, his fortune upon his death was worth aroundgold florins. His death did not greatly affect the bank's operations, and the transition to Cosimo went smoothly, aided by Ilarione, who was retained as ministro.
The timing was unfortunate because the Albizzi government of Florence was moving against the young Medici-led resistance galvanized by the Albizzi government's failure in a war against Lucca and Milanculminating in Cosimo's exile to Venice. De Roover speculates that it was a sub-branch of the Medici bank's Geneva branch serving the General Council of the Churchand was closed when the Council no longer made it worth their while to maintain it.
While the Medicis had done business in Flanders through correspondents and agents sinceit was only when the son of the Venice branch's manager from — was sent to investigate in and favorably reported back that it was incorporated as a limited liability partnership with that son, Bernardo di Giovanni d'Adoardo Portinari —c.
When Angelo Tani — became junior partner inthe branch was finally created as a full and equal partnership in the Medici bank. As mentioned previously, Cosimo's uncle had begun a bank with his third of the ownership stake in Vieri's bank, and it closed in with the death of the grandson of Averardo, taking with it the Medici branch in Pisa.
Formerly, any business that the Medici needed to transact in Pisa such as Cosimo forwarding Donatello money to buy marble had been done through them. On December 26,a limited liability partnership was formed with two outsiders. Over time, the Medici progressively reduced their investment in this partnership, and it appears that they withdrew completely sometime shortly afterwith only one partner keeping it running until Within 2 years, the Avignon branch was converted into a full partnership.
The move was completed in Its first manager Pigello Portinari —October was very capable and this branch did well in loaning to the Sforza court and, like the Roman branch, selling luxuries such as jewels, until Pigello died and was replaced by his feckless brother Accerrito —c. A similar problem would plague the Bruges branch of the bank when managed by the third Portinari brother, Tommaso.
Still, this period — under Cosimo and his ministro Giovanni Benci was the Medici bank's most profitable period. With Cosimo's death on August 1,the decline of the bank began.
Lorenzo de' Medici Failure in Lyons and London[ edit ] An early sign of the decline was the near-failure of the Lyons branch because of its manager's venality, saved only by heroic efforts by Francesco Sassetti March 9, —April .
Its troubles were followed by the troubled London branch, which got into trouble for much the same reason the Bruges branch would—unwisely loaning large sums to secular rulers, a group notorious for their delinquencies in this case, the Yorkist usurper Edward IV.Online shopping from a great selection at Books Store.
Jul 22, · The Medici Bank ( – ) was the largest and most respected bank in Europe during the 15th century.
There are some estimates that the Medici family was for a period of time the wealthiest family in Europe. With this monetary wealth, the family acquired political power initially in Florence, and later in the wider spheres of Italy and Europe.
During the fifteenth century the Medici banking house in Florence ‘almost passed belief’ in power and influence. The Medici Bank was the chief bank for the Roman Catholic curia, and it had branches in the major cities of Italy, as well as in London, Lyon, Geneva, Bruges, and Avignon.
Members of the Medici family became involved in Florentine banking in the latter s. The Medici created a lucrative partnership with another medieval power, the Catholic Church. In what had to be one of the most ingenious enterprises of all time, the Medici bank collected 10% of.
The Medici Bank (Italian: Banco Medici) was a financial institution created by the Medici family in Italy during the 15th century (–). It was the largest and most respected bank in Europe during its prime. There are some estimates that the Medici family was, for a period of time, the wealthiest family in Europe.
Estimating their wealth in today's money is difficult and imprecise.