The Medici Bank

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Giovanni di Bicci de’ Medici founded the Medici bank in 1397 after splitting from his nephew to establish a bank branch in Florence. As the new bank grew and expanded, so did the wealth and power of the Medici family. When Cosimo il Vecchio de’ Medici, Giovanni’s son, took over the banking business in 1434, the increasing economic power of the Medici family allowed them to establish themselves as effective rulers of Florence while keeping the republican system of government nominally intact. The bank provided the Medici family a combination of economic and political power that facilitated the stability of Medici rule. Thus, the failure of the Medici bank during the reign of Lorenzo il Magnifico was key to the collapse of the Medici family’s power in Renaissance Florence because of the vital role that the bank played in the family’s ability to control the city.

The power, prestige, and wealth of the Medici bank allowed the Medici family to obtain their power in Florence in the first place. Though the Medici also participated in the Florentine cloth trade, it was the immense wealth of the bank, and thus the family’s immense personal wealth, that formed the substance of Medici power in Florence. As the bank expanded to include branches in Venice, Geneva, London, Lyon, Avignon, Bruges, and Milan, the international economic power of the Medici increased dramatically. This economic power and influence with foreign rulers, especially rulers like the Pope, who was dependent on the Medici bank for loans, facilitated the Medici family’s rise to power in Florence. , Historians like Manfredi Piccolomini of the Medici Archive Project have also argued that the possibility of controlling or eliminating their domestic banking competition drove...

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