Throughout the 15th century, the surname of an Italian banking family would be synonymous with power. They were the Medici, who, thanks to their loans, would exercise great political influence and finance great works of the Renaissance.
In 1429, Cosme de Medici and Lorenzo de Medici inherited the banking business from their father Giovanni, whose loans would make it possible to pay the salaries of armies and the construction of public works. All this without forgetting the active role of the Medici family in the art world, where they stood out as the great patrons of the Renaissance. We are, therefore, before what was probably the most influential Italian family of the 15th century.
The growing importance of commerce and the bourgeoisie would allow the bank to emerge strongly. The introduction of techniques such as the double entry method, or credit instruments such as bills of exchange, would also contribute to the expansion of the banking business.
What kind of banking business did the Medici run?
“The Medici would enter the category of international bankers, supporting large projects with their loans, which they managed throughout Europe.”
Beyond the environment, it is worth analyzing the efficient, serious and prudent management carried out by Cosme de Médici.
Thus, the Florentine banker ended up establishing branches throughout Europe, in cities such as London, Rome, Lyon, Milan, Geneva, Bruges and Venice. With Florence functioning as the nerve center, the risk and losses that the remaining subsidiaries could assume, which had a significant degree of autonomy, were controlled. It should be noted that the Rome branch would carry out a large volume of business due to the substantial economic relations it had with the Vatican.
But if we look at the banking business of the time, what kind of bankers were the Medici?
In 15th century Italy you could find international moneylenders, money changers and bankers. Thus, the moneylenders were usurers and had to face a fine every year in order to continue their activity and avoid further penalties. The money changers traded in jewelery, were in charge of the currency exchange and could manage deposits.
Finally, the Medici would enter the category of international bankers, supporting large projects with their loans, which they managed throughout Europe.
Usury and sin
“When granting a loan to the Church, the payment of interest could not be demanded, since the bank would be sinning by exercising usury.”
Now, in those days, religious morality was very strict and usury was considered a sin. For this reason, the Medici wanted to satisfy their economic claims, but, at the same time, respect the doctrine of the Church.
The interests of the Medici and the Church would end up aligning, thanks to the fact that the Vatican needed the services of the bank to collect the contributions of the faithful throughout the European continent. On the other hand, when granting a loan to the Church, the payment of interest could not be demanded, since the bank would be sinning by exercising usury.
It was precisely in these loans to the Church that the so-called discretion deposit arose.
Thus, the payment of interest by the Church was made as an incentive or gift. In other words, the payment of interest from the clergy to the bank was not mandatory. In fact, groups of theologians carefully studied the contracts with the bank to ensure that there was no usury.
The great patrons of the Renaissance
“Lorenzo de Medici would take under his protection artists like the famous Michelangelo.”
As we mentioned earlier, greed and usury were not well regarded in 15th century Florence. For this reason, wealthy families like the Medici had to find a way to make their wealth compatible with the doctrine of the Church.
To atone for their sins, the rich paid for artistic works of a religious nature. However, the wealthiest families did not always dedicate their resources to religious works, so they could receive a wake-up call from the Church.
In the case of the Medici, the example of Cosimo de Medici is worth mentioning. In 1430, appearing before Pope Eugene IV, Cosimo asked him how he could enjoy the wealth he had achieved and, at the same time, be free from sin. To achieve the expiation, Eugenio IV proposed to pay for the restoration of the convent of San Marcos. Accepting the suggestion of Eugene IV, Cosimo de ‘Medici ended up spending a considerable sum of money for the restoration of said convent.
One might wonder what was the role of the other Medici as patrons. While Cosme, the banker par excellence of the Medici family, carried out a patronage to avoid showing himself as an ostentatious man and to find a certain political and social balance, Lorenzo the Magnificent was the most prominent patron of the family.
Lorenzo, as an art lover, was dedicated to reviving classical art and myths, creating the school of modern art. Thus, Lorenzo would take under his protection artists such as the famous Michelangelo.
Although it should be noted that although Lorenzo turned to art, he was not as efficient as Cosme when it came to managing family assets.
The decline of the Medici
“Despite having to go into exile for a time, the Medici would exert an important political and religious influence in Italy, establishing themselves as Dukes of Florence and some of the family members coming to occupy the papacy.”
The decline of the Medici family would come after the death of Lorenzo, the dissolution of the bank and the irruption of a fanatical Dominican friar named Girolamo Savonarola.
Considering pagan the art that the Medici had paid for, Savonarola instigated the burning of numerous works of art. Before Savonarola’s onslaught, Piero was aware that the Medici family was in danger, so they decided to leave Florence. Ironically, in 1498, it would be Savonarola himself who, after facing Pope Alexander VI, ended up burning at the stake.
Despite having to go into exile for a time, the Medici would exercise an important political and religious influence in Italy, establishing themselves as Dukes of Florence and some of the family members reaching the papacy (Leo X). However, they no longer returned to the banking business that the family had run between 1397 and 1494.
However, we cannot end without highlighting that, as happened with Leo X, among the members of the family we can highlight four popes: Leo X, Clement VII, Pius IV and Leo XI; two queens of France: Catherine de Medici and Marie de Medici; as well as numerous Florentine leaders and members of the royal houses of France and England.
In conclusion, although its main business and the one that gives it recognition is banking and patronage, the influence of the Medici family extends beyond the banking sector, coming to position itself in command of the Vatican on several occasions, as well as the front of territories, integrating royal houses throughout Europe. And we are talking about a family that, as our headline shows, ended up becoming the most important European family of the Renaissance.