Giovanni di Bicci founds the Medici bank
- Protagonists :
- Giovanni di Bicci de'Medici
- Epoch, date:
Florence, area of the Mercato Vecchio, now Piazza della Repubblica
- Description and history :
In 1397 Giovanni di Bicci founded the Medici bank in Florence, with its headquarters in the vicinity of Orsanmichele, between Via Porta Rossa and Via dell'Arte della Lana.
Giovanni was well versed in the trade having had the privilege of a fruitful experience in the bank of Vieri di Cambio de' Medici, one of the most important in Florence in the late fourteenth century. With Vieri, Giovanni and his brother Francesco had been initially apprentices, then agents and finally minor partners. In 1393 thanks to the dowry of 1,500 florins which he acquired through his marriage to Piccarda Bueri (1385), Giovanni was then able to buy up the Roman branch of Vieri's bank and set up his own business. He selected to join him in the enterprise partners who could make a valid injection into the capital. When Vieri died in 1397, Giovanni moved the premises of the company to Florence, giving rise to a new enterprise with an increasingly vast turnover. It was thus the work of Giovanni di Bicci that laid the definitive foundations for the social and political ascent of the branch of Averardo known as Bicci.
Like the other banks of the period, that of the Medici too performed the functions of a deposit bank, converting bills of exchange in favour of foreign banks, lending money and making investments. The initial capital was of 10,000 florins, over half of it belonging to Giovanni, while the rest belonged to the shareholders. Between 1397 and 1420 the bank succeeded in generating a profit of 151,820 florins, Giovanni's part of which amounted to 113,865. In the meantime he had also taken over the management of two factories producing textiles.
In 1408 the Medici bank had two important branches, in Venice and in Rome respectively. Depending on that of Rome there was also the subsidiary branch of Naples. In 1413 Giovanni managed to become the principal banker to the Pope, his friend John XXIII, practically monopolising the administration of the papal revenue. However this prerogative soon lapsed, when John XXIII was deposed as Antipope at the Council of Constance in 1415. Despite these difficulties, Giovanni di Bicci succeeded in tackling the competition of the banks of the Alberti and the Spini and, exploiting the crisis of these latter, managed to regain a prominent position with the Vatican. Hence, the greatest profits of the Medici bank originated from Rome.
In view of the dimensions of the bank's revenue and the prestige of its clientele, Giovanni di Bicci was able to allow himself various singular initiatives which brought him into the limelight: in 1419 he sent one of his agents to Nuremberg to undertake the payment of 30,000 florins to obtain the liberation of the Antipope John XXIII; in the same year he made available vast amounts of capital to finance the rebuilding of San Lorenzo.
From 1420 to 1435 – in the period in which, with the death of Giovanni (1429) the bank passed to his son Cosimo il Vecchio – the profits soared to 186,382 florins. Through the setting up of his bank Giovanni di Bicci had become the most prominent figure in the Medici family and had laid the foundations for the economic power of his descendants.
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