Magazine

Italian Bank Job


MEDICI MONEY

Banking, Metaphysics, and Art

in Fifteenth-Century Florence

By Tim Parks

Atlas Books/Norton -- 273pp -- $22.95

(Readers'

Reviews below)

Editor's Review

The Good An elegantly told account of a famous Italian clan and its bank

The Bad Could say more about the Medici's contribution to modern banking

The Bottom Line A fascinating glimpse into the strange world of 15th century Florence

It was no mean feat to build a Europewide bank in the 15th century. The powerful Catholic Church considered money-lending to be usury -- and a mortal sin, far worse in the minds of wealthy men than, say, owning child sex slaves. This made things tough for the Medici family, which dominated Renaissance Florence. But they and other bankers developed various subterfuges to earn a profit without technically charging interest. For instance, returns on bank deposits were declared "gifts," and the amount was left to the banker's discretion. An elaborate exchange-rate system was developed under which banks charged a hidden premium for changing money from one currency to another. And because the bankers were also merchants, they might increase the price of goods sold to the church to the tune of the interest they felt they deserved. Nevertheless, what constituted interest was subject to revision by papal whim, so the bankers lived in perpetual fear of condemnation.

The story is elegantly told in Medici Money: Banking, Metaphysics, and Art in Fifteenth-Century Florence. Author Tim Parks is a prolific British-born writer who lives in Italy and whose 1997 novel Europa was short-listed for Britain's prestigious Booker Prize. Medici Money is a brisk "reflection" on the family's tangled and bloody history.

Parks profiles the five key Medici men of the 15th century, starting with Giovanni, who launched the family bank in 1397. The prototypical Medici is Giovanni's long-lived son Cosimo (1389-1464), who built up the bank and came to dominate Florentine politics. But the seeds of the bank's demise were there from the start, since the powerful princes and cardinals who were the bank's clients could never really be obliged to honor their debts.

Some may be disappointed that Parks doesn't say more about the contribution of the Medici to the development of modern banking techniques. But this glimpse into the strange world of 15th century Florence is still fascinating.

By Thane Peterson


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