Famiglia De Medici: The Extraordinary Story Of The Family That Financed The Renaissance

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Photo: Wikimedia Commons

In his 1963 book, ‘The Rise and Decline of the Medici Bank,’ medieval economic historian Raymond de Roover likens the Medici banking dynasty to today’s banking fortresses. And it makes sense. The early Italian banking system was, as it were, the first instance of “modern capitalism based on private ownership,” wrote de Roover.

For that reason (and because the family was wildly successful at what they did) there’s always been consensus that today’s banks could learn a thing or two from the prolific Medici family. 

Before they were bankers, the Medici were doctors in rural town north of Florence

Medici is the plural form of the Italian medico.

Source: The Rise and Fall of the Medici Bank via Google Books

The Medici Bank was born in 1397

Giovanni di Micci de'Medici (1360-1429) was born into a relatively poor Florentine family and received only a nominal inheritance when his father died of the plague.

He founded the Medici Bank in 1397, which became the most successful bank in Florence by his death in 1429. Most historians suspect he received help from a wealthy banker cousin.

Source: The Rise and Fall of the Medici Bank via Google Books

At his death, Giovanni was worth 180,000 Gold Florins

That's about 36,000,000 million USD.

He was the richest man in Florence.

Source: The Rise and Fall of the Medici Bank via Google Books

The eldest of Giovanni's two sons, Cosimo, brought the bank into its hey dey

Better known as Cosimo the Elder, Giovanni's eldest son took over the family bank in 1434 and simultaneously became the Gran Maestro of Florence.

He ran the bank with a 'firm hand' (according to De Roover) and had great political influence, stemming mostly from his ability to purchase votes.

Source: The Rise and Fall of the Medici Bank via Google Books

Under Cosimo, the bank expanded rapidly

And here's what it looked like:

  • They managed the wealth of European 's greatest families (think royalty)
  • A Medici bank note was so respected that it was accepted around Europe as a form of currency
  • The bank had branches in Geneva, Avignon, Bruges, London, Rome, Naples, Venice and Milan
  • High-interest lending was easy because of huge gold and cash deposits and other ventures

Source: Forbes

In their heyday, the Medici were without question the richest family in Europe

And with great wealth came great power.

But after Cosimo's death, it became clear that the bank had taken on too much

Forbes' Marcello Simonetta points out that, like many financial institutions today, the bank struggled most in coordinating its various branches and choosing a successor.

What this meant was a whole lot of strife between Cosimo's son and grandson--Piero and Lorenzo--and the rest of the Medici clan.

Banking operations subsequently took a backseat.

Sources: Forbes and The Rise and Fall of the Medici Bank via Google Books

Cosimo's grandson Lorenzo panicked and sold the bank to the state

Then he raised taxes and embezzled the money they generated, which caused a credit crunch.

Lorenzo died in 1492 and his son was kicked out of Florence shortly thereafter.

Source: Forbes

Despite these tensions, the Medici family left an extraordinary legacy

They pretty much funded the Renaissance

Cosimo is known today as the godfather of the Renaissance.

He sat on the Council of Florence and shelled out some serious money for culture in the city--he was a good friend and supporter of Brunelleschi.

Source: PBS

Cosimo also changed the architectural character of Florence

He paid for the construction of the first (and now ubiquitous) renaissance Palazzo: the Palazzo Medici, among many other civic projects.

Source: The Medici via Google Books

And they changed how accounting worked

The Medici developed the double-entry accounting system, in which both debts and credits are recorded in adjacent columns.

Source: 'Book-keeping' found in Medieval Italy: An Encyclopedia

Although the Medici banking dynasty may have crumbled with Piero, the family stuck around for a few more centuries

Until their demise in the eighteenth century, the Medici held royal posts as the Dukes of Tuscany.

Catherine de Medici (daughter of Lorenzo II) even became the Queen of France in 1547 when she married King Henry II and was immortalised in Peter Paul Rubens' Medici Cycle (which you can travel to the Louvre and see today).

Source: The Medici via Google Books

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