Saturday, November 15, 2008

The Medici Meltdown.

In its heyday, the Florentine banking conglomerate was the largest in Europe. It had branches in Geneva, Avignon, Bruges and London as well as in Rome, Naples, Venice and Milan. Founded in 1397 by Giovanni di Bicci, the bank's fortune reached its peak under the wise management of Cosimo de' Medici, the famous patron of the arts.

The expansion of the banking activities continued at an extraordinary pace until his death in 1464. Gold and cash deposits along with commercial ventures and merchandise exchanges guaranteed a continuous flow for high-interest lending, which was wisely supervised. But the Bank soon began to overstretch itself.

History repeats itself. Read the whole thing.

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