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Intel - History
14th Century Banking Collapse

"In God we trust.
All others we monitor."

• The Bardi, Peruzzi, and Acciovoli family banks were all founded in the years around 1250. These were “Black Guelph” noble families allied to Venice.

• In 1337, the English King Edward III fostered prowess in archery by prohibiting, on pain of death, all sport except archery...

• In 1337, the English King Edward III fostered prowess in archery by prohibiting, on pain of death, all sport except archery, and cancelling the debts of all workmen who manufactured the bows of yew and their arrows.

Edward III's Plantagenet Coat of Arms

• Edward III had financed the war against France through usurious loans underwritten by the Venetian-controlled Florentine banking firms of the Bardi and the Peruzzi, which were secured on the expected revenue from a tax on wool. When the tax brought in too little (production of wool in England had begun to decline from about 1310) and Edward could not repay, the Peruzzi failed in 1343, the Bardi suspended a year later, and their crash brought down a third firm, the Acciovoli.

• The company's courier system acted as an intelligence-gathering system often embroiled in diplomacy.

King Edward III

• Edward owed the Bardi 900,000 gold florins (£135,000) and the Peruzzi 600,000 (£90,000).
• However, the Peruzzi’s records show that they never had that much capital to lend Edward III.
• Edward did not default on all his loans and repaid some with cash and others with royal grants of wool, a principal export of the English economy at the time.

• The size of the bank should not be understated: by the 1330s, the Peruzzi bank was the second largest in Europe, with fifteen branches from the Middle East to London, all capitalized to the sum of more than 100000 gold florins and manned by approximately 100 factors.

• The third largest financial company, the Acciaiuoli, also went bankrupt, and they did not lend any money to Edward.
• What loans Edward III did default on are likely only to have contributed to the financial problems in Florence, not caused them.

• Economic devastation in Florence and Siena resulting from the banking collapse, was followed, first by the renewal of war between England and France in 1346.

• Economic devastation in Florence and Siena resulting from the banking collapse, was followed, first by the renewal of war between England and France in 1346, then, by famine in 1347.

• Economic devastation in Florence and Siena resulting from the banking collapse, was followed, first by the renewal of war between England and France in 1346, then, by famine in 1347, and, finally, by the first outbreak of plague—the “Black Death”—in Messina in 1347.