The Medici name carries a heavy significance in the world of the Renaissance, the arts, and more importantly the world of banking. Once one of the most economically, prosperous and politically powerful families in all of Europe, there estate went unrivaled by any family of their time. This paper will examine the rise, maturation, and decline of the Medici bank operation through the leadership of the Medici's: Giovanni, Cosimo I, Piero di Gouty, and Lorenzo the magnificent. Observations about the operations and management will be made that led the Medici fortune to great success on the banking firm and eventually the disillusion of their financial operations.
With the fall of Medieval Christianity and the rise of the guild systems, family owned business began to emerge as the new standard of commerce in Florence. With this trend came a moderately known family from the small agricultural town of Mugello (about 25 km north of Florence) that began practicing successful banking and would soon become one of the richest and most powerful families in Europe.
[...] The Rome branch that handled the papal finances (the most important commission of the Medici bank) was also temporarily housed in Florence, by Santa Maria Novella, because the pope Eugenius IV was in Florence from 1439-1443. In the year 1440 there were three other branches: one n Geneva (although it was later transferred to Lyons), one in Bruges and one in Ancona. The next branch to open was Pisa, when Cosimo purchased an old palace and converted it to another bank branch. [...]
[...] The inscription was later re-inscribed and the tomb still stands in its grandeur provided a reminder to all that see it that the Medici political hand ruled strong in matter of the church. Ten short years after the commission of the tomb for John XXIII, Giovanni died, leaving the Medici Bank firm to be inherited by his son Cosimo di Medici (known Cosimo I). After Giovani had trouble with the complications of a divided inheritance, he decided to leave his sole inheritance to his son Cosimo leaving his in absolute control of the Medici bank and there estate (Fremante, 2001). [...]
[...] Of all of the great Medici rulers, Piero if often seen as forgetful as his crippling illness made him an unimpressive political figure and limited his amount of public exposure. Despite his personal strife however, upon his inheritance of the Medici bank firm, he ordered a review of the banks assets. Upon investigation it was discovered that the bank possessed great debts and a grave “over-extension of credit”. In response to the debt troubles of the bank, Piero ordered the temporary stagnation of the London, Bruges and Milan bank while opting to close the Venice branch permanently. [...]
[...] Decline of the Medici Bank.” The Journal of Economic History,May, 1947,Vol No pp. 69-82. Fremantle, Richard. God and Money: Florence and the Medici in the Rennaiasance. Florence: Olschki Gromley, Larry of the Roses” March 2009
[...] The Medici bank was prospering at a fast rate yet, their success would soon erupt when an appointment would propel the Medici name into the central spotlight of the Florentine banking guild system. In 1413 Giovanni was named to the title of Chief Papal banker by Pope John XXIII [1]entrusted with all of the pope's finances. (Fremante, 2001). The acquisition of this position brought the firm the great exposure and is seen by some as one of the most important acquisition of the bank in its early years. [...]
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