The Next Renaissance

CHAPTER 7Widening Wall Street

Origins of Banking

When Giovanni di Bicci de' Medici opened his family's bank in Florence in 1397, he helped start a revolution in finance. Banking had existed in scattered forms before, but the Medici were among the first to formalize it as an institution. Their clients were monarchs, merchants, and even the papacy. They used simple tools that proved powerful in reorganizing the global economy. Bills of exchange allowed merchants to settle debts across cities without carrying gold. Double‐entry bookkeeping tracked exchange systematically, tallying profit and loss with precision for the first time.

It's easy to think banking is as old as the idea of money, but for centuries before Medici opened his bank, money was tied to land, treasure chests, or barter. Trade was local, fragile, and risky to expand. But from Florence, Venice, and Genoa, Medici and other merchant families turned it into something that flowed across borders, funded new enterprises, and fueled upward mobility. Finance changed from storing wealth, to building it.

The Medici's customers extended far beyond the Pope. The rise of merchant banks helped fund artists, explorers, and scholars, giving fuel to the Renaissance's creative machine. Their fortunes underwrote the works of Brunelleschi, Botticelli, and Michelangelo. The genius of the era could be seen spreading across Europe in paintings, sculptures, and voyages of discovery, but beneath it all, the burgeoning financial architecture ...