Medici Banking Center of Florence

Timeline

1. 1397–1464Florence · TuscanyGiovanni di Bicci de' Medici founded the Medici Bank in Florence in 1397 and subsequently opened branches in major European cities. His son Cosimo de' Medici (Cosimo the Elder, 1389–1464) expanded the bank into Europe's largest financial institution, with branches in Rome, Venice, Milan, Geneva, Lyon, Bruges, and London, relying on close ties with the papal curia to monopolize the exchange business of papal finances.
2. 1464–1490Florence · TuscanyUnder Lorenzo de' Medici (Lorenzo the Magnificent, 1449–1492), Florence became a dual center of European arts and finance. The Medici Bank made extensive use of bills of exchange for cross-border settlement, circumventing the Church's prohibition on usury, and innovated mechanisms such as 'term deposits' and 'branch profit-sharing,' laying the foundation for the modern banking system and attracting merchants and artists from across Europe to Florence.
3. c. 1490–1520Florence · TuscanyIn the 1490s the Medici Bank declined due to mismanagement and a surge in bad debts, formally going bankrupt in 1494 when the family was expelled from Florence. Yet Florence's banking tradition did not die: families such as the Bardi, Strozzi, and Rucellai remained active, and between 1511 and 1520 Florence was still northern Italy's most important center for credit and currency exchange, with its financial legal framework and accounting practices continuing to spread northward in Europe.