Medici Bank

The Medici Bank (Italian: Banco dei Medici ˈbaŋko dei ˈmɛːditʃi) was a financial institution created by the Medici family in Italy during the 15th century (1397–1494). It was the largest and most respected bank in Europe during its prime. There are some estimates that the Medici family was, for a period of time, the wealthiest family in Europe. Estimating their wealth in today's money is difficult and imprecise, considering that they owned art, land, and gold. With this monetary wealth, the family acquired political power initially in Florence, and later in the wider spheres of Italy and Europe. A notable contribution to the professions of banking and accounting pioneered by the Medici Bank was the improvement of the general ledger system through the development of the double entry system of tracking debits and credits or deposits and withdrawals. Giovanni di Bicci de' Medici established the bank in Florence, and while he and his family were influential in the Florentine government, it was not until his son Cosimo the Elder took over in 1434 as gran maestro that the Medici became the unofficial head of state of the Florentine republic. The Medici family had long been involved in banking at a high level, maintaining their status as a respectably upper-class and notably wealthy family who derived their money from land holdings in the Mugello region towards the Apennines, north of Florence. The Medicis were not only bankers but innovators in financial accounting. At one point, the Medicis managed many of the great fortunes in Italy, from royalty to merchants. Giovanni's father Averardo (?–1363; known as "Bicci") was not a very successful businessman or banker. A distant cousin, Vieri di Cambio (1323–1396), however, was one of Florence's more prominent bankers (the first of the various modestly upper-class Medici lineages, numbering around 20 in 1364). His banking house trained and employed Giovanni and his elder brother Francesco (c. 1350–1412), who eventually became partners in the firm.