The Failure Of The Medici Bank

By this time the Medici bank had attracted the attention of the papacy in Rome as a legitimate and substantial financing operation. The papal treasury was not allowed to directly deal with the exchange of funds collected from foreign countries and had to rely on international banking operations such as the Medici’s to convert the currencies when needed. As the church was exorbitantly wealthy they acted more of a lender to the Medici business and they could maintain consistent and guaranteed profits. As the relationship grew this portion of their business accounted for nearly 30% of the total profits and the Florence based business only brought in 23%. Still the headquarters was firmly placed in Florence and most all the excess funds from

By this time the bank had amassed enough wealth to be a true force in the region and showed no signs of major deterioration. The only problem being the decline of the wool industries in Florence had forced the Medici bank to diversify further into lending and holdings with less concrete factory production. Unfortunately, after a lifetime of building the business Giovanni was now 60 years old and in failing health. Slowing pulling himself away from the enterprise Giovanni had started the process of passing the torch to his eventually successors and some of the most significant men in Renaissance history. His sons Cosimo and Lorenzo Medici had most of the business and the finance contracts placed under their control near the end of Giovanni’s life to ease the transition. Starting a new chapter in the business they would start quickly in restructuring various agreements and the goals of the Medici

The unsuccessful attempt by Florence to capture Lucca and the various plague events ravaging the city had left the citizens discontent with the current leaders. Many influential people were looking at the newly mobilized Medici’s to try to force control of the city. Although the brothers at the time had no clear intentions of a military overthrow their opponents the Rinaldo’s were clearly feeling threatened and considered pre-emptive attack. Forced by concerns of seizure the Medici’s quickly liquidated many of their assets in Florence and pushed them towards Rome for safe keeping in the likely situation of strong arming from political opponents. This increased the proportion of wealth generated in Rome to 63% of their total company value and placed them back in the center of religious politics. Lorenzo was giving the title of ambassador to the Pope to better manage the papal court and had permanently moved to Rome until his death in 1440, but Cosimo was not finished with his home