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188-569: 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

376-641: A British fleet . However, Naples' lower class lazzaroni were strongly pious and royalist, favouring the Bourbons; in the mêlée that followed, they fought the Neapolitan pro-Republican aristocracy, causing a civil war. Eventually, the Republicans conquered Castel Sant'Elmo and proclaimed a Parthenopaean Republic , secured by the French Army . A counter-revolutionary religious army of lazzaroni known as

564-403: A "policy of retrenchment". This policy doesn't seem to have been fully carried out. Niccolò Machiavelli states in his history of Florence that Piero's policy involved calling in loans for repayment, which caused a number of Florentine businesses to collapse, sparking a plot against Piero and Medici rule. Whether Machiavelli is overstating issues and Piero had merely ordered a thorough accounting

752-1002: A Medici branch. If the bank could not establish a branch somewhere, then they would usually contract with some Italian banker (preferably one of the Florentine banks) to honor drafts and accept bills of exchange: So the Medici were represented by the firm of Filippo Strozzi and Co. in Naples , by Piero del Fede and Co. in Valencia , by Nicolaio d'Ameleto and Antonio Bonafè in Bologna , by Filippo and Federigo Centurioni in Genoa , by Gherardo Bueri —a close relative of Cosimo—in Lübeck , and so forth. Of course, if an Italian agent could not be procured, any trustworthy banker would do; in Cologne , their representative

940-412: A bank account is considered indispensable by most businesses and individuals. Non-banks that provide payment services such as remittance companies are normally not considered as an adequate substitute for a bank account. Banks issue new money when they make loans. In contemporary banking systems, regulators set a minimum level of reserve funds that banks must hold against the deposit liabilities created by

1128-502: A barrel as the king could block any attempts to export English wool by the Medici, which was desperately needed by the bank for two reasons. English wool was the finest in the world; if Florence's artisans did not have a supply of English wool to weave, it could not sell its textile wares, and more importantly, could not employ the Florentine lower classes who specialized in textiles. Flemish wool had once served in English wool's place, but after

1316-437: A country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional-reserve banking , under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity , banks are generally subject to minimum capital requirements based on an international set of capital standards,

1504-570: A frenzied mob. Nevertheless, the sources are sufficiently numerous (exceeded only by the Datini 's bank's archives, in Tuscany /Prato) that the Medici bank is well understood, especially as the remains of the Medici records were given to the city of Florence by a descendant of the Medici. Banks in Renaissance Florence were generally divided into three or four kinds: Because of communication delays,

1692-618: A generation or two because some of the inheriting sons usually wished to strike out on their own. At this time, the Medici bank was flourishing: besides the branches in Rome and Florence, the Venetian and Genevan branches had been founded. Ilarione would not last long in his position, and is mentioned as dead in a letter written in February 1433. The timing was unfortunate because the Albizzi government of Florence

1880-454: A good deal of their output to Milan and the Sforzas . Banking A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans . Lending activities can be directly performed by the bank or indirectly through capital markets . Whereas banks play an important role in financial stability and the economy of

2068-476: A hall of the castle, and following this Pope Boniface VIII was elected pope by the cardinal collegium , before moving to Rome. Castel Capuano was built in the 12th century by William I , the son of Roger II of Sicily , the first monarch of the Kingdom of Naples . It was expanded by Frederick II and became one of his royal palaces. The castle was the residence of many kings and queens throughout its history. In

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2256-426: A junior partner in 1408). In 1420, Benedetto de' Bardi (the ministro , or general manager, of all the branches) died, and was succeeded by his younger brother Ilarione de' Bardi, who was the manager of the Rome branch. He dissolved one of the wool factories, along with other reorganizations occasioned by partnerships coming to their designated end. This date is interesting because Ilarione's contract with his principal

2444-425: A large number of small to medium-sized institutions in its banking system. As of November 2009, China's top four banks have in excess of 67,000 branches ( ICBC :18000+, BOC :12000+, CCB :13000+, ABC :24000+) with an additional 140 smaller banks with an undetermined number of branches. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy each had more than 30,000 branches – more than double

2632-499: A little less than a decade after Averardo's death. The third bank was controlled by Giovanni in partnership with Benedetto di Lippaccio de' Bardi (1373–1420). The Medici bank's founding is usually dated to 1397, since it was this year that Giovanni di Bicci de' Medici separated his bank from his nephew Averardo's bank (which had effectively been acting as a branch in Rome), and moved his small bank from Rome to Florence. The branch in Rome

2820-505: A mere factor in the Avignon branch to its general manager, and then a post in Geneva eventually to end up in 1458 in Florence proper at Cosimo's side. Sassetti was left to handle much of the business himself. In the end, it turned out badly. Whether simply due to bad luck, old age, increasing laziness, or diversion of his time to studying humanism like Cosimo, Sassetti failed to discover the fraud at

3008-422: A more contemporary viewpoint in his Istorie fiorentine , asserting that the fall of the Medici was due to their loose rein on their bank's managers who began to act like princes and not sensible businessmen and merchants. When the crisis loomed, one way to try to avert it was to simply start reducing the interest paid on discretionary and demand deposits . But such a move would have hurt the Medici name, and so it

3196-513: A paragon of Hellenistic culture . During the Roman era, the people of Naples maintained their Greek language and customs. At the same time, the city was expanded with elegant Roman villas , aqueducts , and public baths . Landmarks such as the Temple of Dioscures were built, and many emperors chose to holiday in the city, including Claudius and Tiberius . Virgil , the author of Rome's national epic ,

3384-420: A particular Medici branch a certain sum of money, as verified by the general or assistant manager of that branch (who were the only ones allowed to make out such bills). The bill instructed the recipient Medici branch to pay back that sum in local currency, but not at whatever the local exchange rate for the two currencies concerned happened to be at the moment the bill was presented to be cashed in, but rather at

3572-458: A population of 909,048 within the city's administrative limits as of 2022. Its province-level municipality is the third-most populous metropolitan city in Italy with a population of 3,115,320 residents, and its metropolitan area stretches beyond the boundaries of the city wall for approximately 30 kilometres (20 miles). Naples plays also a key international role in international diplomacy, since it

3760-462: A profit when a bill was issued in one of the Italian branches because they could demand a premium of sorts for being asked to deliver money in a far away place at however far in the future usance set the maturation date. De Roover offers this real example: Around July 15, 1441, the Medici of Venice bought a bill on Bruges at the rate of 54 1 ⁄ 2 groats per Venetian ducat . Two months later, when

3948-403: A proxy for general economic conditions, as the problem could be that "by this time, in fact, Florentine guilds had long lost much of an economic function in the areas of their formally defined activity, with the result that the quality of their internal administration deteriorated; but this institutional history cannot be taken as an indicator of the vitality of the respective sectors of the economy

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4136-417: A reckoning of profits would be made. Indeed, the structure of the Medici Bank resembles nothing so much as the modern holding company . The branch manager (the governatore , or "governor", would have put up a portion of his own money at the start of the partnership) and the investing partners could take out their profits at this point, since salaries or dividends were not paid when the partnership agreement

4324-554: A result of good relations between brothers, but because one of the two heirs died before inheriting. In theory, Lorenzo's son Pierfrancesco could have insisted on his share of the estate, but Pierfrancesco was raised by Cosimo and "his emotional ties to his uncle were sufficiently strong to preclude his withdrawal from the company." Pierfrancesco seems to have grown increasingly disaffected, but his death in 1476 prevented any separation. In retrospect, given how Lorenzo would steal from Pierfrancesco's estate while raising his two sons to finance

4512-514: A result of the gradual move of the Geneva branch, due to the reduction in traffic to the fairs at Geneva and the establishment of four major fairs in Lyons which attracted around 140 other Florentine businesses). The move was completed in 1466. The structure and functions of the Medici bank were largely settled into their final form by this point; a branch would be opened in Milan in late 1452, or early 1453, at

4700-416: A safe and convenient form of money backed by the goldsmith's promise to pay, allowing goldsmiths to advance loans with little risk of default . Thus the goldsmiths of London became the forerunners of banking by creating new money based on credit. The Bank of England originated the permanent issue of banknotes in 1695. The Royal Bank of Scotland established the first overdraft facility in 1728. By

4888-503: A salary for their service. So the nine original outsiders could slowly leverage their 21 1 ⁄ 4 shares to overwhelm the Peruzzi's collective 36 3 ⁄ 4 shares. The lack of clear leadership, though, when the leading partner died has been suggested as another factor in the failure of the Bardi and Peruzzi banks. Such a takeover was impossible in the Medici Bank. The essential structure

5076-465: A surrender in the face of insurgents. The city was already completely freed by 1 October 1943, when British and American forces entered the city. Departing Germans burned the library of the university , as well as the Italian Royal Society. They also destroyed the city archives. Time bombs planted throughout the city continued to explode into November. The symbol of the rebirth of Naples was

5264-399: A variety of different ways including interest, transaction fees and financial advice. Traditionally, the most significant method is via charging interest on the capital it lends out to customers. The bank profits from the difference between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference

5452-469: A whole pound, he takes a loss: instead of the 10 pounds he could have gotten had he not bought the bill of exchange, he will instead receive only 5. Similarly, if the florin weakens greatly, he could well reap a windfall at the expense of the London branch. Clearly the branches would want to try to maximize sales of bills of exchange in the former situation, where the rate of the issuing currency increases between

5640-446: Is a bank regulation , which sets a framework within which a bank or depository institution must manage its balance sheet . The categorisation of assets and capital is highly standardised so that it can be risk weighted . After the financial crisis of 2007–2008 , regulators force banks to issue Contingent convertible bonds (CoCos). These are hybrid capital securities that absorb losses in accordance with their contractual terms when

5828-400: Is a Bills of Exchange Act that codifies the law in relation to negotiable instruments , including cheques, and this Act contains a statutory definition of the term banker : banker includes a body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation). Although this definition seems circular, it is actually functional, because it ensures that

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6016-403: Is a list of the largest deals in history in terms of value with participation from at least one bank: Currently, commercial banks are regulated in most jurisdictions by government entities and require a special bank license to operate. Usually, the definition of the business of banking for the purposes of regulation is extended to include acceptance of deposits, even if they are not repayable to

6204-507: Is also considered a capital of the Baroque , beginning with the artist Caravaggio 's career in the 17th century and the artistic revolution he inspired. It was also an important centre of humanism and Enlightenment . The city has long been a global point of reference for classical music and opera through the Neapolitan School . Between 1925 and 1936, Naples was expanded and upgraded by

6392-609: Is home to NATO 's Allied Joint Force Command Naples and of the Parliamentary Assembly of the Mediterranean . Founded by Greeks in the first millennium BC, Naples is one of the oldest continuously inhabited urban areas in the world. In the eighth century BC, a colony known as Parthenope ( Ancient Greek : Παρθενόπη ) was established on the Pizzofalcone hill. In the sixth century BC, it was refounded as Neápolis. The city

6580-579: Is one of the city's main museums, with one of the most extensive collections of artefacts of the Roman Empire in the world. It also houses many of the antiques unearthed at Pompeii and Herculaneum , as well as some artefacts from the Greek and Renaissance periods. Previously a Bourbon palace, now a museum and art gallery, the Museo di Capodimonte is another museum of note. The gallery features paintings from

6768-431: Is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers and the stage of the economic cycle . Fees and financial advice constitute a more stable revenue stream and banks have therefore placed more emphasis on these revenue lines to smooth their financial performance. In

6956-435: Is the city's premier place of worship; each year on 19 September, it hosts the longstanding Miracle of Saint Januarius , the city's patron saint . During the miracle, which thousands of Neapolitans flock to witness, the dried blood of Januarius is said to turn to liquid when brought close to holy relics said to be of his body. Below is a selective list of Naples' major churches, chapels, and monastery complexes: Aside from

7144-444: Is the oldest opera house in Italy. Directly across San Carlo is Galleria Umberto . Naples is well known for its castles: The most ancient is Castel dell'Ovo ("Egg Castle"), which was built on the tiny islet of Megarides, where the original Cumaean colonists had founded the city. In Roman times the islet became part of Lucullus 's villa, later hosting Romulus Augustulus , the exiled last western Roman emperor. It had also been

7332-489: Is unknown. Machiavelli can probably be trusted here since there was a rash of bankruptcies and bank failures in Florence shortly after Cosimo's death which led to a small recession. De Roover mentions, however, the war between Venice and the Ottoman Empire and the relevant firms' connections to that area as a possible factor as well. It is certain, however, that Piero tried to wind up the London branch and recover as much of

7520-569: The Aeneid , received part of his education in the city, and later resided in its environs. It was during this period that Christianity first arrived in Naples; the apostles Peter and Paul are said to have preached in the city. Januarius , who would become Naples' patron saint , was martyred there in the fourth century AD. The last emperor of the Western Roman Empire , Romulus Augustulus ,

7708-457: The sanfedisti under Cardinal Fabrizio Ruffo was raised; they met with great success, and the French were forced to surrender the Neapolitan castles, with their fleet sailing back to Toulon . Ferdinand IV was restored as king; however, after only seven years, Napoleon conquered the kingdom and installed Bonapartist kings, including installing his brother Joseph Bonaparte . With the help of

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7896-641: The Alberti , who were just large enough to capture the Catholic Church 's business. But the Alberti firm split over internecine quarrels, and the clan was banished from Florence in 1382 (though they would be allowed to return in 1434), creating yet another void. Giovanni's choice proved to be prescient, especially since what Florence was lacking was a good port on the Mediterranean —which it would obtain in 1406 with

8084-512: The Alta Velocità high-speed rail link to Rome and Salerno and an expanded subway network . Naples is the third-largest urban economy in Italy by GDP, after Milan and Rome. The Port of Naples is one of the most important in Europe. Naples' historic city centre has been designated as a UNESCO World Heritage Site . A wide range of culturally and historically significant sites are nearby, including

8272-683: The Austrian Empire and its allies, the Bonapartists were defeated in the Neapolitan War . Ferdinand IV once again regained the throne and the kingdom. The Congress of Vienna in 1815 saw the kingdoms of Naples and Sicily combine to form the Kingdom of the Two Sicilies , with Naples as the capital city. In 1839, Naples became the first city on the Italian Peninsula to have a railway, with

8460-605: The Basel Accords . Banking in its modern sense evolved in the fourteenth century in the prosperous cities of Renaissance Italy but, in many ways, functioned as a continuation of ideas and concepts of credit and lending that had their roots in the ancient world . In the history of banking , a number of banking dynasties  – notably, the Medicis , the Pazzi , the Fuggers ,

8648-640: The Battle of Garigliano in 1503. Following the Spanish victory, Naples became part of the Spanish Empire , and remained so throughout the Spanish Habsburg period. The Spanish sent viceroys to Naples to directly deal with local issues: the most important of these viceroys was Pedro Álvarez de Toledo , who was responsible for considerable social, economic and urban reforms in the city; he also tried to introduce

8836-568: The Byzantine Emperor , with numerous local pretenders feuding for possession of the ducal throne. Theoctistus was appointed without imperial approval; his appointment was later revoked and Theodore II took his place. However, the disgruntled general populace chased him from the city and elected Stephen III instead, a man who minted coins with his initials rather than those of the Byzantine Emperor. Naples gained complete independence by

9024-520: The Fascist regime . During the later years of World War II , it sustained severe damage from Allied bombing as they invaded the peninsula. The city underwent extensive reconstruction work after the war. Since the late 20th century, Naples has had significant economic growth, helped by the construction of the Centro Direzionale business district and an advanced transportation network, which includes

9212-705: The Federal Deposit Insurance Corporation (FDIC) as a regulator. However, for soundness examinations (i.e., whether a bank is operating in a sound manner), the Federal Reserve is the primary federal regulator for Fed-member state banks; the Office of the Comptroller of the Currency (OCC) is the primary federal regulator for national banks. State non-member banks are examined by the state agencies as well as

9400-631: The Great Depression , the U.S. Savings and Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s, and the sub-prime mortgage crisis in the 2000s. The 2023 global banking crisis is the latest of these crises: In March 2023, liquidity shortages and bank insolvencies led to three bank failures in the United States , and within two weeks, several of the world's largest banks failed or were shut down by regulators Assets of

9588-518: The Iberian Peninsula . Naples also became a centre of the Renaissance, with artists such as Laurana , da Messina , Sannazzaro and Poliziano arriving in the city. In 1501, Naples came under direct rule from France under Louis XII , with the Neapolitan king Frederick being taken as a prisoner to France; however, this state of affairs did not last long, as Spain won Naples from the French at

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9776-759: The Inquisition . In 1544, around 7,000 people were taken as slaves by Barbary pirates and brought to the Barbary Coast of North Africa (see Sack of Naples ). By the 17th century, Naples had become Europe's second-largest city – second only to Paris – and the largest European Mediterranean city, with around 250,000 inhabitants. The city was a major cultural centre during the Baroque era, being home to artists such as Caravaggio , Salvator Rosa and Bernini , philosophers such as Bernardino Telesio , Giordano Bruno , Tommaso Campanella and Giambattista Vico , and writers such as Giambattista Marino . A revolution led by

9964-636: The Kingdom of Sicily , with Palermo as the capital. After a period of Norman rule, in 1189, the Kingdom of Sicily was in a succession dispute between Tancred, King of Sicily of an illegitimate birth and the Hohenstaufens , a Germanic royal house , as its Prince Henry had married Princess Constance the last legitimate heir to the Sicilian throne. In 1191 Henry invaded Sicily after being crowned as Henry VI, Holy Roman Emperor , and many cities surrendered. Still, Naples resisted him from May to August under

10152-579: The Lombards for a brief period after the capture by Pandulf IV of the Principality of Capua , a long-term rival of Naples; however, this regime lasted only three years before the Greco-Roman-influenced dukes were reinstated. By the 11th century, Naples had begun to employ Norman mercenaries to battle their rivals; Duke Sergius IV hired Rainulf Drengot to wage war on Capua for him. By 1137,

10340-522: The Medici Bank , in 1397. The Republic of Genoa founded the earliest-known state deposit bank, and Banco di San Giorgio (Bank of St. George), in 1407 at Genoa , Italy. Fractional reserve banking and the issue of banknotes emerged in the 17th and 18th centuries. Merchants started to store their gold with the goldsmiths of London , who possessed private vaults , and who charged a fee for that service. In exchange for each deposit of precious metal,

10528-546: The Palace of Caserta and the Roman ruins of Pompeii and Herculaneum . In 2017 the BBC defined Naples as "the Italian city with too much history to handle". The most prominent forms of architecture visible in present-day Naples are the Medieval , Renaissance and Baroque styles. Naples has a total of 448 historical churches (1000 in total ), making it one of the most Catholic cities in

10716-519: The Palace of Caserta and the Roman ruins of Pompeii and Herculaneum . Naples is also known for its natural beauties, such as Posillipo , Phlegraean Fields , Nisida and Vesuvius . Neapolitan cuisine is noted for its association with pizza , which originated in the city, as well as numerous other local dishes. Restaurants in the Naples' area have earned the most stars from the Michelin Guide of any Italian province. Naples' Centro Direzionale

10904-563: The Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths. The definition of a bank varies from country to country. See the relevant country pages for more information. Under English common law , a banker is defined as a person who carries on the business of banking by conducting current accounts for their customers, paying cheques drawn on them and also collecting cheques for their customers. In most common law jurisdictions there

11092-718: The Roman Republic against Carthage . During the Samnite Wars , the city, now a bustling centre of trade, was captured by the Samnites ; however, the Romans soon captured the city from them and made it a Roman colony . During the Punic Wars , the strong walls surrounding Neápolis repelled the invading forces of the Carthaginian general Hannibal . The Romans greatly respected Naples as

11280-427: The Royal Palace of Naples stands the Galleria Umberto I , which contains the Coral Jewellery Museum . Occupying a 19th-century palazzo renovated by the Portuguese architect Álvaro Siza , the Museo d'Arte Contemporanea Donnaregina (MADRE) features an enfilade procession of permanent installations by artists such as Francesco Clemente , Richard Serra , and Rebecca Horn . The 16th-century palace of Roccella hosts

11468-423: The Welsers , the Berenbergs , and the Rothschilds  – have played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant bank is Berenberg Bank (founded in 1590). Banking as an archaic activity (or quasi-banking ) is thought to have begun as early as the end of the 4th millennium BCE, to

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11656-416: The late-2000s recession had a severe impact on the city, intensifying its waste-management and unemployment problems. By August 2011, the number of unemployed in the Naples area had risen to 250,000, sparking public protests against the economic situation. In June 2012, allegations of blackmail, extortion, and illicit contract tendering emerged concerning the city's waste management issues. Naples hosted

11844-412: The 11,243 gold florins he had deposited with the branch back when it was with the Medici bank). Even at the time of its downfall, the Medici bank was the biggest bank in Europe, with at least seven branches and over fifty factors. De Roover attributes the beginning of the bank's decline to Cosimo de' Medici. He spent the vast majority of his time wrapped up in politics, and when he was not preoccupied with

12032-399: The 1350s, it no longer had a market in Italy and was essentially not imported after 1400. Unemployment generated considerable political unrest and revolts, which would be aimed at Piero and the Medici since he and his family were seen as the true rulers of Florence. The second reason was that there was a systemic specie problem in the Medici bank in which hard currency flowed south to Italy from

12220-411: The 13th to the 18th centuries, including major works by Simone Martini , Raphael , Titian , Caravaggio , El Greco , Jusepe de Ribera and Luca Giordano . The royal apartments are furnished with antique 18th-century furniture and a collection of porcelain and majolica from the various royal residences: the famous Capodimonte Porcelain Factory once stood just adjacent to the palace. In front of

12408-445: The 14th century, the Hungarian Angevin king Louis the Great captured the city several times. In 1442, Alfonso I conquered Naples after his victory against the last Angevin king, René , and Naples was unified with Sicily again for a brief period. Sicily and Naples were separated since 1282, but remained dependencies of Aragon under Ferdinand I . The new dynasty enhanced Naples' commercial standing by establishing relations with

12596-417: The 15,000 branches in the United Kingdom. Between 1985 and 2018 banks engaged in around 28,798 mergers or acquisitions, either as the acquirer or the target company. The overall known value of these deals cumulates to around 5,169 bil. USD. In terms of value, there have been two major waves (1999 and 2007) which both peaked at around 460 bil. USD followed by a steep decline (−82% from 2007 until 2018). Here

12784-401: The 16th century by the Spanish, was demolished in 1906 to make room for the Via Marina, although two of the castle's towers remain as a monument. The Vigliena Fort, built in 1702, was destroyed in 1799 during the royalist war against the Parthenopean Republic and is now abandoned and in ruin. Naples is widely known for its wealth of historical museums. The Naples National Archaeological Museum

12972-431: The 16th century, it became the Hall of Justice. Another Neapolitan castle is Castel Sant'Elmo , which was completed in 1329 and is built in the shape of a star . Its strategic position overlooking the entire city made it a target of various invaders. During the uprising of Masaniello in 1647, the Spanish took refuge in Sant'Elmo to escape the revolutionaries. The Carmine Castle , built in 1392 and highly modified in

13160-404: The 19th century, we find in ordinary cases of deposits, of money with banking corporations, or bankers, the transaction amounts to a mere loan, or mutuum , and the bank is to restore, not the same money, but an equivalent sum, whenever it is demanded and money, when paid into a bank, ceases altogether to be the money of the principal (see Parker v. Marchant, 1 Phillips 360); it is then the money of

13348-419: The 3rd millennia BCE. The present era of banking can be traced to medieval and early Renaissance Italy, to the rich cities in the centre and north like Florence , Lucca , Siena , Venice and Genoa . The Bardi and Peruzzi families dominated banking in 14th-century Florence, establishing branches in many other parts of Europe. Giovanni di Bicci de' Medici set up one of the most famous Italian banks,

13536-589: The Bruges branch of the bank when managed by the third Portinari brother, Tommaso. Still, this period (1435–1455) under Cosimo and his ministro Giovanni Benci was the Medici bank's most profitable period. With Cosimo's death on August 1, 1464, the decline of the bank began. An early sign of the decline was the near-failure of the Lyon branch because of its manager's venality, saved only by heroic efforts by Francesco Sassetti (1421–1490). Its troubles were followed by

13724-488: The Bruges branch. After Piero's death, Portinari managed to get articles of partnership so favorable that he lived in Florence, only visiting the Low Countries for business. The end-period of the branch would be marked by chaos and possibly fraud. Portinari would refuse to return some deposits, claiming that the monies had really been invested in partnership. He would also claim Angelo Tani as a full partner (and thus liable in

13912-574: The Duke of Noja , employing rigorous surveying accuracy and becoming an essential urban planning tool for Naples. During the time of Ferdinand IV , the effects of the French Revolution were felt in Naples: Horatio Nelson , an ally of the Bourbons, arrived in the city in 1798 to warn against the French republicans. Ferdinand was forced to retreat and fled to Palermo , where he was protected by

14100-406: The English nobility 1,000, and another 7,000 pounds were tied up in goods dispatched on consignment and not soon recoverable. Operating funds were (like previous failing branches had done) borrowed from Medici branches at high rates of interest. Edward IV amortized a portion of his debt, but these reductions were soon rendered less helpful (but not negated outright) by fresh loans and sales of silk. By

14288-522: The FDIC. National banks have one primary regulator – the OCC. Each regulatory agency has its own set of rules and regulations to which banks and thrifts must adhere. The Federal Financial Institutions Examination Council (FFIEC) was established in 1979 as a formal inter-agency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions. Although

14476-482: The FFIEC has resulted in a greater degree of regulatory consistency between the agencies, the rules and regulations are constantly changing. Naples Naples ( / ˈ n eɪ p əl z / NAY -pəlz ; Italian : Napoli [ˈnaːpoli] ; Neapolitan : Napule [ˈnɑːpələ] ) is the regional capital of Campania and the third-largest city of Italy , after Rome and Milan , with

14664-410: The Lyons branch until it was too late for it to hope to remain solvent. The branch manager Lionetto de' Rossi had attempted to cover up his incompetence by being far too optimistic as to the number of bad loans the branch would have to cover, and by borrowing funds from other banks, thus artificially inflating his profits. That, however, is not the only factor that caused the fall. A long term trend in

14852-463: The Medici Bank was forced to establish two groups of relatively independent subsidiary units in important cities which communicated with the head bank via mail. Pisa , Milan , Venice in 1402, Geneva (moved to Lyons in 1466), Avignon , Bruges , London and an itinerant branch that followed the Pope around to tend to his needs—not for nothing have they been called "God's Bankers"—all hosted

15040-403: The Medici bank was flourishing and rapidly expanding its assets across Italy, but nevertheless there were perhaps only 17 employees in total of the bank in 1402, with only five at the central bank in Florence, although they were reasonably well-paid and promotions seem to have been rapid when warranted (such as in the case of Giuliano di Giovanni di ser Matteo, who went from being a clerk in 1401 to

15228-559: The Medici bank. A legally similar situation was obtained for an "accomandita" established in Ancona , apparently to finance Francesco Sforza , an ally of Cosimo's. As mentioned previously, Cosimo's uncle had begun a bank with his third of the ownership stake in Vieri's bank, and it closed in 1443 with the death of the grandson of Averardo, taking with it the Medici branch in Pisa. Formerly, any business that

15416-432: The Medici needed to transact in Pisa (such as Cosimo forwarding Donatello money to buy marble ) had been done through them. On December 26, 1442, a limited liability partnership was formed with two outsiders. Over time, the Medici progressively reduced their investment in this partnership, and it appears that they withdrew completely sometime shortly after 1457, with only one partner keeping it running until 1476. 1446 saw

15604-552: The Medici-rented employee housing (although the managers had little say in their selection, which was done by the Florence bank), but policy was set by the seniors, and often firmly. The Bruges branch was, when first incorporated, strictly forbidden by the terms of the partnership to lend money to temporal lords and kings. Policy would generally be communicated to the branch managers during their biennial or triennial trips to Florence to report in person and discuss important issues, or in

15792-577: 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

15980-563: The Naples area between 1876 and 1913. In the forty years following unification, the population of Naples grew by only 26%, vs. 63% for Turin and 103% for Milan; however, by 1884, Naples was still the largest city in Italy with 496,499 inhabitants, or roughly 64,000 per square kilometre (more than twice the population density of Paris). Public health conditions in certain areas of the city were poor, with twelve epidemics of cholera and typhoid fever claiming some 48,000 people between 1834 and 1884. A death rate 31.84 per thousand, high even for

16168-560: The Normans had attained great influence in Italy, controlling previously independent principalities and duchies such as Capua , Benevento , Salerno , Amalfi , Sorrento and Gaeta ; it was in this year that Naples, the last independent duchy in the southern part of the peninsula, came under Norman control. The last ruling duke of the duchy, Sergius VII , was forced to surrender to Roger II , who had been proclaimed King of Sicily by Antipope Anacletus II seven years earlier. Naples thus joined

16356-642: The Palazzo delle Arti Napoli, which contains the civic collections of art belonging to the City of Naples, and features temporary exhibits of art and culture. Palazzo Como, which dates from the 15th century, hosts the Museo Civico Filangieri of plastic arts , created in 1883 by Gaetano Filangieri . Naples is the seat of the Archdiocese of Naples ; there are hundreds of churches in the city. The Cathedral of Naples

16544-553: The Papal Curia; in comparison, the total capitalization of the entire Medici bank was only about 25,000 gold florins) and 13% from Venice between 1420 and 1435 (with the later Medici branches opened in Bruges, London, Pisa, Avignon, Milan, and Lyon contributing nothing as they had not been founded yet). At this time, there seems to have been some sort of Medici office in Basel , and it seems to have lasted until 1443. De Roover speculates that it

16732-567: The UK, for example, the Financial Services Authority licenses banks, and some commercial banks (such as the Bank of Scotland ) issue their own banknotes in addition to those issued by the Bank of England , the UK government's central bank. Banking law is based on a contractual analysis of the relationship between the bank (defined above) and the customer  – defined as any entity for which

16920-537: The ancient Greek foundation of Neapolis is still discernible. It has indeed continued to provide the layout for the present-day Historic Centre of Naples, one of the major Mediterranean port cities. From the Middle Ages to the 18th century, Naples was a focal point in terms of art and architecture, expressed in its ancient forts, the royal ensembles such as the Royal Palace of 1600, and the palaces and churches sponsored by

17108-639: The bank agrees to conduct an account. The law implies rights and obligations into this relationship as follows: These implied contractual terms may be modified by express agreement between the customer and the bank. The statutes and regulations in force within a particular jurisdiction may also modify the above terms or create new rights, obligations, or limitations relevant to the bank-customer relationship. Some types of financial institutions, such as building societies and credit unions , may be partly or wholly exempt from bank license requirements, and therefore regulated under separate rules. The requirements for

17296-468: The bank and depended on his secretary and his great-uncle Giovanni Tornabuoni to handle everything. The two mismanaged the bank and balked the new ministro's, Giovambattista Bracci, efforts (Sassetti having died of a stroke in March 1490). If the Medici family and its bank had not been politically overthrown in 1494, it would probably have failed shortly thereafter in a long-delayed bankruptcy. Another factor in

17484-411: The bank will not repay it), and interest rate risk (the possibility that the bank will become unprofitable, if rising interest rates force it to pay relatively more on its deposits than it receives on its loans). Banking crises have developed many times throughout history when one or more risks have emerged for the banking sector as a whole. Prominent examples include the bank run that occurred during

17672-420: The bank's operations, and the transition to Cosimo went smoothly, aided by Ilarione, who was retained as ministro . Fortunately for the bank, Lorenzo di Giovanni di Bicci de' Medici was on excellent terms with Cosimo, and did not insist on dissolving the partnerships so he could receive his share of the patrimony ( primogeniture not being operative here); many Florentine banks and mercantile businesses lasted only

17860-667: The bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer , EFTPOS , and automated teller machines (ATMs). Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits , and by issuing debt securities such as banknotes and bonds . Banks lend money by making advances to customers on current accounts, by making installment loans , and by investing in marketable debt securities and other forms of money lending. Banks provide different payment services, and

18048-456: The banker, who is bound to return an equivalent, by paying a similar sum to that deposited with him, when he is asked for it. The goldsmith paid interest on deposits. Since the promissory notes were payable on demand, and the advances (loans) to the goldsmith's customers were repayable over a longer time-period, this was an early form of fractional reserve banking . The promissory notes developed into an assignable instrument which could circulate as

18236-655: The beginning of the 19th century Lubbock's Bank had established a bankers' clearing house in London to allow multiple banks to clear transactions. The Rothschilds pioneered international finance on a large scale, financing the purchase of shares in the Suez canal for the British government in 1875. The word bank was taken into Middle English from Middle French banque , from Old Italian banco , meaning "table", from Old High German banc, bank "bench, counter". Benches were used as makeshift desks or exchange counters during

18424-526: The bill matured, they received in Bruges 54 1 ⁄ 2 groats for each ducat. With the proceeds of this bill the Bruges branch, acting as [an] agent for the Venice branch, bought a bill on Venice, payable at the end of two months, at the rate of 51 1 ⁄ 2 groats per ducat. The Medici of Venice thus made a profit of 3 groats on each ducat over a period of four months, since they received 54 1 ⁄ 2 groats and paid 51 1 ⁄ 2 groats. If

18612-443: The books and dissolve the partnership. Portinari ironically found himself hoisted by his own petard; he could not refuse the dissolution, since the maggiore Lorenzo had given the proper notice, and he further had to accept his own cooked books because he claimed that the books were accurate and the rather doubtful assets listed were indeed worth what they were worth. The agent Ricasoli was aided in this task by Angelo Tani, who came all

18800-515: The business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purpose of regulating and supervising banks rather than regulating the actual business of banking. However, in many cases, the statutory definition closely mirrors the common law one. Examples of statutory definitions: Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking ,

18988-533: The capital of the issuing bank falls below a certain level. Then debt is reduced and bank capitalisation gets a boost. Owing to their capacity to absorb losses, CoCos have the potential to satisfy regulatory capital requirement. The economic functions of banks include: Banks are susceptible to many forms of risk which have triggered occasional systemic crises. These include liquidity risk (where many depositors may request withdrawals in excess of available funds), credit risk (the chance that those who owe money to

19176-483: The cheque has lost its primacy in most banking systems as a payment instrument. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques . Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers in

19364-811: The city for the Ostrogoths, but the Byzantines seized control of the area following the Battle of Mons Lactarius on the slopes of Vesuvius . Naples was expected to keep in contact with the Exarchate of Ravenna , which was the centre of Byzantine power on the Italian Peninsula . After the exarchate fell, a Duchy of Naples was created. Although Naples' Greco-Roman culture endured, it eventually switched allegiance from Constantinople to Rome under Duke Stephen II , putting it under papal suzerainty by 763. The years between 818 and 832 saw tumultuous relations with

19552-659: The city from Vienna through viceroys of his own. However, the War of the Polish Succession saw the Spanish regain Sicily and Naples as part of a personal union , with the 1738 Treaty of Vienna recognising the two polities as independent under a cadet branch of the Spanish Bourbons . In 1755, the Duke of Noja commissioned an accurate topographic map of Naples, later known as the Map of

19740-528: The city's recent illegal waste disposal issues to the Camorra , the organized crime network centered in Campania. Due to illegal waste dumping, as exposed by Roberto Saviano in his book Gomorrah , severe environmental contamination and increased health risks remain prevalent. In 2007, Silvio Berlusconi 's government held senior meetings in Naples to demonstrate their intention to solve these problems. However,

19928-629: The city. Many examples of Gothic architecture sprang up around Naples, including the Naples Cathedral , which remains the city's main church. In 1282, after the Sicilian Vespers , the Kingdom of Sicily was divided into two. The Angevin Kingdom of Naples included the southern part of the Italian peninsula, while the island of Sicily became the Aragonese Kingdom of Sicily . Wars between

20116-422: The clever ruse of shifting all the London branch's business to the Bruges branch—except for the profitable wool business. Portinari bought into the separate partnership to the tune of 45%, whereas his share in the Bruges branch was only 27.5%. The branch was liquidated in 1478 with staggering losses. The failure of the Bruges branch meant that not only the debts of that branch had to be handled somehow, but also

20304-463: The collapse of the Medicis' political power in Florence in 1494, when Savonarola and the Pope struck against them. The central Florentine banco was burned by a mob, the Lyons branch was taken over by a rival firm, and the Roman branch struck off on its own despite the branch being bankrupt in general (ironically, they would suffer still more debts when a Medici cardinal became Pope Leo X and inquired after

20492-487: The competing dynasties continued until the Peace of Caltabellotta in 1302, which saw Frederick III recognised as king of Sicily, while Charles II was recognised as king of Naples by Pope Boniface VIII . Despite the split, Naples grew in importance, attracting Pisan and Genoese merchants, Tuscan bankers, and some of the most prominent Renaissance artists of the time, such as Boccaccio , Petrarch and Giotto . During

20680-471: The conquest of Pisa and its Porto Pisano . A further advantage was that it was much easier to invest a bank's capital in Florence than in Rome, and because of the Holy See 's deposits (obtained through Giovanni's long contacts with them), the bank had a fair amount of capital to invest in other ventures. A factor was dispatched to Venice to seek out investment opportunities. He did well and on March 25, 1402,

20868-795: The construction of the Naples–Portici railway . After the Expedition of the Thousand led by Giuseppe Garibaldi , which culminated in the controversial siege of Gaeta , Naples became part of the Kingdom of Italy in 1861 as part of the Italian unification , ending the era of Bourbon rule. The economy of the area formerly known as the Two Sicilies as dependant on agriculture suffered the international pressure on prices of wheat, and together with lower sea fares prices lead to an unprecedented wave of emigration , with an estimated 4 million people emigrating from

21056-415: The court and the aristocracy was probably the chief reason for establishing branches in both Milan in 1452 or 1453 and Naples in 1471, and over-extension of credit through personal loans created severe and ultimately insurmountable problems for both operations. With Lorenzo's death on April 8, 1492, the succession passed to his 20-year-old son Piero di Lorenzo (1472–1521). Piero had no talent for running

21244-423: The cross-selling of complementary products. Banks face a number of risks in order to conduct their business, and how well these risks are managed and understood is a key driver behind profitability, and how much capital a bank is required to hold. Bank capital consists principally of equity , retained earnings and subordinated debt . Some of the main risks faced by banks include: The capital requirement

21432-408: The customer's order – although money lending, by itself, is generally not included in the definition. Unlike most other regulated industries, the regulator is typically also a participant in the market, being either publicly or privately governed central bank . Central banks also typically have a monopoly on the business of issuing banknotes . However, in some countries, this is not the case. In

21620-483: The decline of the Medici bank were the spending habits of the Medici. According to Lorenzo, between 1434 and 1471, the family spent an average of 17,467 gold florins a year. Another misjudgement or failure by Sassetti was placing his trust in Tommaso Portinari instead of in more trustworthy managers like Angelo Tani; Portinari would eventually cause the collapse of the bank's Bruges branch. Niccolò Machiavelli gave

21808-400: The devaluation of gold against silver (which held steady) between 1475 and 1485—possibly thanks to increased output by German and Bohemian silver mines—meant that as creditors, the Medici Bank was on the wrong side of the trend. Their deposits were held in gold, and interest was paid in gold. This trend was in part attributable to Florence's reluctance to debase the gold florin, which

21996-476: The early ninth century. Naples allied with the Muslim Saracens in 836 and asked for their support to repel the siege of Lombard troops coming from the neighbouring Duchy of Benevento . However, during the 850s, Muslim general Muhammad I Abu 'l-Abbas sacked Miseno , but only for Khums purposes (Islamic booty), without conquering the territories of Campania . The duchy was under the direct control of

22184-433: The exchange rate in Bruges had been 54 1 ⁄ 2 groats instead of 51 1 ⁄ 2 per ducat, the Medici of Venice would have broken even because they would have paid and received the same number of groats for each ducat. A controlling interest in a bottega di seta (silk shop) and two botteghe di lana (cloth manufacturing establishment) were further possessions of the Medici (although run in partnership with men of

22372-439: The exchange rate set when the presenting (or current owner; bills of exchange could be sold and traded freely) person bought the bill of exchange. That there was a difference in time was guaranteed by the terms of the bill. A specific date could be set, but generally the time between a bill was issued in one city and could be cashed in at another was set by long-standing custom, or at usance . The usance between Florence and London

22560-450: The failure of the Bruges branch) appealed to him to overrule Sassetti and restrict the lending of the London branch, that "he [Lorenzo] did not understand such matters." He would later admit that his lack of knowledge and understanding was the reason he approved Tommaso Portinari's disastrous schemes. Goldthwaite faults Lorenzo in no uncertain terms: Lorenzo il Magnifico, for whom politics always took priority over business. Service to

22748-536: The firm. Francesco became a junior partner in 1382, while Giovanni rose to become general manager of the Rome branch in 1385, which was incorporated as a partnership, though it was not necessary to capitalize that branch (because the Church was usually depositing funds and not borrowing). Vieri was long-lived, but his bank split into three separate banks sometime between 1391 and 1392. One bank failed quickly. The second, managed by Francesco and later his son, survived until 1443,

22936-589: The funding of these loans, in order to ensure that the banks can meet demands for payment of such deposits. These reserves can be acquired through the acceptance of new deposits, sale of other assets, or borrowing from other banks including the central bank. Activities undertaken by banks include personal banking , corporate banking , investment banking , private banking , transaction banking , insurance , consumer finance , trade finance and other related. Banks offer many different channels to access their banking and other services: A bank can generate revenue in

23124-407: The goldsmiths issued receipts certifying the quantity and purity of the metal they held as a bailee ; these receipts could not be assigned, only the original depositor could collect the stored goods. Gradually the goldsmiths began to lend money out on behalf of the depositor , and promissory notes , which evolved into banknotes, were issued for money deposited as a loan to the goldsmith. Thus, by

23312-453: The guild itself into disuse, the outside chronicler Giovanni Cambi noting that of the 9 large banks left in Florence by 1516, one failed on December 25. This banking decline does not appear to have been specific to Florence; similar declines were seen in Bruges and Venice (although apparently not in Spain ). Similarly, the northern branches of all European banks were squeezed by a general decline in

23500-678: The guilds nominally represented." Piero died on December 2, 1469. He was succeeded by his two sons, Lorenzo and Giuliano. Lorenzo's interest in politics and art (which led to his appellation "the Magnificent") forced him to rely on his ministro Francesco Sassetti to handle most affairs of the bank. Sassetti can be faulted and inculpated in the decline of the bank for failing to prevent the disasters of Lyon and Bruges, and Lorenzo for relying too much on Sassetti and not listening to him when Sassetti did notice problems or tried to fix things. Indeed, Lorenzo once said when Angelo Tani (who had tried to prevent

23688-611: The instigation of the grateful Sforza. Its first manager Pigello Portinari (1421–1468) was very capable and this branch did well in loaning to the Sforza court and, like the Roman branch, selling luxuries such as jewels, until Pigello died and was replaced by his feckless brother Accerrito (1427– c. 1503) who could not manage the massive amounts lent to the Milanese court and to Duke Sforza (who did not repay his debts of 179,000 ducats before his death in 1478). A similar problem would plague

23876-421: The interest on the deposit, since a depositor would gain revenue on the principal without any risk to the principal, which would have made both parties usurers and sinners; nor could they charge fees or other such devices. Discretionary deposits were a partial way out, but the bank made most of its money by selling holographic "bills of exchange". These bills certified that a particular person or company had paid

24064-463: The intricate plotting and other characteristics of Florentine politics, he was patronizing the many fine Renaissance scholars and artists who were present there, or engaged in composing his own renowned poetry. This left minimal time for the careful selection of branch managers and the maintenance of an alert watch against fraud within the bank, which was greatly needed. Most of the financial duties handed over to Francesco Sassetti, who had risen from being

24252-442: The issue of a bank license vary between jurisdictions but typically include: Banks' activities can be divided into: Most banks are profit-making, private enterprises. However, some are owned by the government, or are non-profit organisations . The United States banking industry is one of the most heavily regulated and guarded in the world, with multiple specialised and focused regulators. All banks with FDIC-insured deposits have

24440-614: The kingdom. Conflict between the Hohenstaufens and the Papacy led in 1266 to Pope Innocent IV crowning the Angevin duke Charles I King of Sicily: Charles officially moved the capital from Palermo to Naples, where he resided at the Castel Nuovo . Having a great interest in architecture, Charles I imported French architects and workmen and was personally involved in several building projects in

24628-409: The largest 1,000 banks in the world grew by 6.8% in the 2008–2009 financial year to a record US$ 96.4 trillion while profits declined by 85% to US$ 115 billion. Growth in assets in adverse market conditions was largely a result of recapitalisation. EU banks held the largest share of the total, 56% in 2008–2009, down from 61% in the previous year. Asian banks' share increased from 12% to 14% during

24816-504: The leadership of Richard, Count of Acerra , Nicholas of Ajello , Aligerno Cottone and Margaritus of Brindisi before the Germans suffered from disease and were forced to retreat. Conrad II, Duke of Bohemia and Philip I, Archbishop of Cologne died of disease during the siege . During his counterattack, Tancred captured Constance, now empress. He had the empress imprisoned at Castel dell'Ovo at Naples before her release on May 1192 under

25004-450: The legal basis for bank transactions such as cheques does not depend on how the bank is structured or regulated. The business of banking is in many common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business . When looking at these definitions it is important to keep in mind that they are defining

25192-578: The loans made to Edward IV as possible, ordered the Milan branch to loan less, instructed Tommaso Portinari of the Bruges branch to get rid of the galleys and not make any loans to secular rulers, and attempted to shut down the Venice branch which was no longer profitable. From the perspective of carrying out his policies, Piero faced a number of obstacles—it was always politically costly to demand that loans be repaid, particularly when made to monarchs and powerful nobles and such demands could cost Piero dearly close to home. The king of England had him over

25380-529: The local fisherman Masaniello saw the creation of a brief independent Neapolitan Republic in 1647. However, this lasted only a few months before Spanish rule was reasserted. In 1656, an outbreak of bubonic plague killed about half of Naples' 300,000 inhabitants. In 1714, Spanish rule over Naples came to an end as a result of the War of the Spanish Succession ; the Austrian Charles VI ruled

25568-505: The losses), despite the fact that Tani never signed the articles or written with his approval. The magnitude of the financial failures is hard to state. In a surviving memorandum, Lorenzo the Magnificent gives the bad debts to Charles the Bold alone as the sum of 16,150 pounds groat. The articles of partnership, incidentally, strictly forbade Portinari to lend more than the total of 6,000 pounds groat. In another memorandum, Lorenzo faults Portinari for

25756-465: The main cause of insalubrity , with large and airy avenues. The project proved difficult to accomplish politically and economically due to corruption, as shown in the Saredo Inquiry , land speculation and extremely long bureaucracy. This led to the project to massive delays with contrasting results. The most notable transformations made were the construction of Via Caracciolo in place of the beach along

25944-494: The manager Alessandro Martelli invested 2,000 of the 14,000 ducats. He would be paid of the total profits not his fair 1 ⁄ 7 th, but rather 1 ⁄ 5 th). The manager could, if he wished, attempt to start a rival bank, but he could not legally claim to be part of the Medici Bank, since a right to use that trademarked name came with the partnership. This measure would turn out to be effective against ambitious dissident juniors like Tommaso Portinari. However, even before

26132-440: The necessary technical expertise). They paid by the piece and ran on the putting-out system ; for the wool especially it was a very complex system, in which the early steps had to be done in the factories but then the spinning of the wool was done by women outside the factory, and the yarn collected to be brought to the weavers, who would then turn it over to the dyers and finishers in the factory. Legally, they were incorporated much

26320-421: The ninth century BC. By the eighth century BC, the settlement was expanded by Cumaeans , as evidenced by the archaeological findings, to include Monte Echia. In the sixth century BC the city was refounded as Neápolis ( Νεάπολις ), eventually becoming one of the foremost cities of Magna Graecia . The city grew rapidly due to the influence of the powerful Greek city-state of Syracuse , and became an ally of

26508-673: The noble families. The main city square or piazza of the city is the Piazza del Plebiscito . Its construction was begun by the Bonapartist king Joachim Murat and finished by the Bourbon king Ferdinand IV . The piazza is bounded on the east by the Royal Palace and on the west by the church of San Francesco di Paola , with the colonnades extending on both sides. Nearby is the Teatro di San Carlo , which

26696-438: The northern countries, and the import of English wool was necessary to provide a conduit for currency to flow north and balance the books. So when King Edward IV demanded loans, the London branch had little choice but to oblige him if it wanted to continue to export English wool to Florence. By 1494, the Milan branch of the Medici bank also ceased to exist. The branches that did not die off on their own generally met their end with

26884-456: The outstanding Plantagenet debt. After the London branch failed, it was turned into a accomando and placed under the control of the Bruges branch, managed by the third of the Portinari brothers, Tommaso Portinari . This branch, too, would soon fail. Portinari had managed the Bruges branch for decades, and had steadily proven himself to be a poor manager—he engaged in business dealings on

27072-411: The outstanding debts of the former London branch. In total, upwards of 70,000 gold florins were lost. This figure is optimistic, since it assumes most book assets were worth the recorded value. As Lorenzo remarked, "These are the great profits which are accruing to us through the management of Tommaso Portinari." Lorenzo refused to take this loss lying down, and dispatched a trusted agent to Bruges to audit

27260-455: The past 20 years, American banks have taken many measures to ensure that they remain profitable while responding to increasingly changing market conditions. This helps in making a profit and facilitates economic development as a whole. Recently, as banks have been faced with pressure from fintechs, new and additional business models have been suggested such as freemium, monetisation of data, white-labeling of banking and payment applications, or

27448-444: The political pressure of King Charles VIII of France 's 1494 invasion of Italy caused Piero di Lorenzo de' Medici to concede to the dual forces of Charles and the impending insolvency of the Medici bank. The Medici bank's remaining assets and records were seized and distributed to creditors and others. All the branches were declared dissolved. Not much remains of the Medici Bank's records; mentions of it and its activities are rife in

27636-422: The pressure of Pope Celestine III . In 1194 Henry started his second campaign upon the death of Tancred, but this time Aligerno surrendered without resistance, and finally, Henry conquered Sicily, putting it under the rule of Hohenstaufens. The University of Naples , the first university in Europe dedicated to training secular administrators, was founded by Frederick II , making Naples the intellectual centre of

27824-440: The prison for Empress Constance between 1191 and 1192 after her being captured by Sicilians, and Conradin and Giovanna I of Naples before their executions. Castel Nuovo , also known as Maschio Angioino , is one of the city's top landmarks; it was built during the time of Charles I , the first king of Naples . Castel Nuovo has seen many notable historical events: for example, in 1294, Pope Celestine V resigned as pope in

28012-420: The private letters and reports their couriers carried. Usury was still banned by the Church in this period, with an interpretation concisely expressed as Quidquid sorti accedit, usura est ("Whatever exceeds the principal is usury"). So the Medici Bank could not openly adopt the modern formula of promising to pay interest on demand deposits and loaning out a fraction of the deposits at greater interest to pay for

28200-475: The promenade, the creation of Galleria Umberto I and Galleria Principe and the construction of Corso Umberto. Naples was the most-bombed Italian city during World War II . Though Neapolitans did not rebel under Italian Fascism , Naples was the first Italian city to rise up against German military occupation ; for the first time in Europe, the Nazis, whose leader in this case was Colonel Scholl, negotiated

28388-480: The rebuilding of the church of Santa Chiara , which had been destroyed in a United States Army Air Corps bombing raid. Special funding from the Italian government's Fund for the South was provided from 1950 to 1984, helping the Neapolitan economy to improve somewhat, with city landmarks such as the Piazza del Plebiscito being renovated. However, high unemployment continues to affect Naples. Italian media attributed

28576-528: The same as the branches, although unlike the branches, the managers apparently had complete latitude in managing employees. The silk shop produced some of the finest silk wares, and were usually sold to Florentine exporters or shipped to the branch in Bruges as a consignment to feed the Burgundian court's strong appetite for such goods, or to the branch in Milan to sell to the Sforza court. The cloth manufacturers similarly produced very high-quality pieces and sold

28764-421: The shares' profits were paid out, any sums invested in the branch outside of an ownership of shares were repaid at a set interest rate, sometimes leading to one branch paying another for the latter's investment in the former. Governors were given wide latitude in daily operations and in the management of their seven or eight assistant managers, clerks, cashiers, accountants , or couriers who lived and boarded at

28952-423: The side, ingratiated himself with the Burgundian court by excessive loans (first to secure the farming of the toll of Graveline —which was never very profitable—and then to mingle socially and elevate himself), made poor business deals like purchasing two galleys (which would be partially sold off at a loss; the rest would be lost to shipwreck and piracy). The debts from the London branch were assumed by

29140-607: The sixth World Urban Forum in September 2012 and the 63rd International Astronautical Congress in October 2012. In 2013, it was the host of the Universal Forum of Cultures and the host for the 2019 Summer Universiade . Naples' 2,800-year history has left it with a wealth of historical buildings and monuments, from medieval castles to classical ruins, and a wide range of culturally and historically significant sites nearby, including

29328-493: The spring of 1469, Tani had finished repairing the London branch's operations to his own satisfaction, and returned to Italy. His work would be undone by the unhelpfulness of the other branch managers and the fecklessness of the London branch manager Canigiani. The fatal blow was the Wars of the Roses , which rendered Edward IV unable to repay the loans (the best he could do in way of repayment

29516-462: The start of two Medici branches: the sub-branch that was the Bruges branch was converted into a full partnership, and a limited liability partnership in Avignon, the largest center of trade in southern France (despite the departure of the Papacy). Within 2 years, the Avignon branch was converted into a full partnership. The Medici branch at Lyons was not actually founded as a separate branch; it came about as

29704-496: The supply of English wool. Agreement on these aggravating factors does not seem to be universal; Richard A. Goldthwaite writes in 1987 that "these economic conditions have never been adequately explained. It appears more likely that the contraction and decline of the Medici bank under Lorenzo—it was reduced to branches in only Florence, Rome and Lyons by the time he died in 1492—were due simply to bad management." He also claims that banking guild memberships cannot be used as

29892-462: The taxman. The once voluminous internal documentation has been grievously reduced by the passage of time: This study is based mainly on the business records of the Medici Bank: partnership agreements, correspondence, and account books. The extant material is unfortunately fragmentary; for example, no balance sheets have survived. Only a few pages of some of the account books have escaped destruction by

30080-415: The third branch of the Medici bank was opened. It suffered from some initial mismanagement (by the factor who had previously done so well—he made the fatal mistake of violating the partnership agreement and loaning money to Germans; on a more humane note, he would eventually become a pauper and be sent 20 florins by Giovanni, who felt that a past partner deserved some charity), but soon was prospering. It

30268-467: The time of issuance and payment. This they attempted to do with frequent letters between branches and paying close attention to exchange rates. While close to loans, the element of risk meant that this practice did not actually become usury, except in the case of "dry exchange", where the moving around of money was fictitious. With appropriate issuances of bills, branches could move around money and actually make money. Similarly, they could be fairly certain of

30456-408: The time, insisted in the absence of epidemics between 1878 and 1883. Then in 1884, Naples fell victim to a major cholera epidemic, caused largely by the city's poor sewerage infrastructure. In response to these problems, in 1885, the government prompted a radical transformation of the city called risanamento to improve the sewerage infrastructure and replace the most clustered areas, considered

30644-547: The troubled London branch, which got into trouble for much the same reason the Bruges branch would—unwisely loaning large sums to secular rulers, a group notorious for their delinquencies (in this case, the Yorkist Edward IV ). In a sense, that branch had no choice but to make the loans, since it faced domestic opposition from English merchant and clothier interests in London and their representatives in Parliament, which

30832-501: The war against Rome following the Pazzi Conspiracy , Pierfrancesco would have been wiser to effect such a separation. Specifically, Lorenzo appropriated about 53,643 gold florins and only repaid part of the sum. Piero was not Cosimo's equal, but given his training did perhaps better than one would expect, especially considering how he was rendered bedridden by severe gout . Piero recognized the approaching problems, and tried to begin

31020-479: The way from Florence to settle the matter of his supposed partnership in the London branch through the Bruges branch. Upon Cosimo's death, his estate and control of the bank passed to his eldest son, Piero di Cosimo "the Gouty" ( Piero il Gottoso ). Piero had been given a humanist education, unlike his younger brother who was trained in business but had died in 1463. The estate remained intact, though in this case not as

31208-474: The world in terms of the number of places of worship. In 1995, the historic centre of Naples was listed by UNESCO as a World Heritage Site , a United Nations programme which aims to catalogue and conserve sites of outstanding cultural or natural importance to the common heritage of mankind . Naples is one of the most ancient cities in Europe, whose contemporary urban fabric preserves the elements of its long and eventful history. The rectangular grid layout of

31396-518: The world. Naples has been inhabited since the Neolithic period. In the second millennium BC, a first Mycenaean settlement arose not far from the geographical position of the future city of Parthenope. Sailors from the Greek island of Rhodes established probably a small commercial port called Parthenope ( Παρθενόπη , meaning "Pure Eyes", a Siren in Greek mythology ) on the island of Megaride in

31584-442: The writings of outsiders, but outsiders necessarily had little access to the balance books which could truly tell the story of the bank's rise and fall, and certainly not to the confidential business correspondence and the secret books. Some of the most copious documentation, derived from archived tax records such as the catasto records, are largely useless since the various principals of the bank were not above flagrantly lying to

31772-459: The year, while the share of US banks increased from 11% to 13%. Fee revenue generated by global investment in banking totalled US$ 66.3 billion in 2009, up 12% on the previous year. The United States has the most banks in the world in terms of institutions (5,330 as of 2015) and possibly branches (81,607 as of 2015). This is an indicator of the geography and regulatory structure of the US, resulting in

31960-403: Was 3 months, for example. A fictional but illustrative example: a merchant is traveling from Florence to London. He buys a bill of exchange for 10 florins, with the understanding that the London branch will cash that bill at half a pound to the florin, for a total of 5 pounds. If he reaches London and discovers that the florin has become stronger against the pound, to the point where a florin buys

32148-585: Was a sub-branch of the Medici bank's Geneva branch serving the General Council of the Church , and was closed when the Council no longer made it worth their while to maintain it. On March 24, 1439, the Medici branch at Bruges was officially founded. While the Medicis had done business in Flanders through correspondents and agents since 1416, it was only when the son of the Venice branch's manager (from 1417–1435)

32336-461: Was an important part of Magna Graecia , played a major role in the merging of Greek and Roman society, and was a significant cultural centre under the Romans. Naples served as the capital of the Duchy of Naples (661–1139), subsequently as the capital of the Kingdom of Naples (1282–1816), and finally as the capital of the Kingdom of the Two Sicilies — until the unification of Italy in 1861. Naples

32524-599: Was built in 1994 as the first grouping of skyscrapers in Italy, remaining the only such grouping in Italy until 2009. The most widely-known sports team in Naples is the Serie A football club Napoli , three-time Italian champions (most recently in 2023), who play at the Stadio Diego Armando Maradona in the west of the city, in the Fuorigrotta quartier. In 2024, TasteAtlas ranked Naples the 2nd city with best food in

32712-419: Was done in the name of Cosimo and Lorenzo, and not their father Giovanni; this perhaps marks the beginnings of a transfer of responsibility and power in the Medici bank from one generation to the next. Two Portinaris were put in charge of the Florence and Venice branches. Giovanni died in 1429. According to Lorenzo, his fortune upon his death was worth around 180,000 gold florins. His death did not greatly affect

32900-497: Was entrusted to Benedetto, and Giovanni took on Gentile di Baldassarre Buoni (1371–1427) as a partner. They raised 10,000 gold florins and began operating in Florence, though Gentile soon left the firm. This move had certain advantages for a bank, inasmuch as the predominant large banks of the 14th century which were based in Florence—;the Bardi, Acciaioli, Peruzzi—had met with problems, and saw their places usurped by

33088-417: Was exiled to Naples by the Germanic king Odoacer in the fifth century AD. Following the decline of the Western Roman Empire , Naples was captured by the Ostrogoths , a Germanic people , and incorporated into the Ostrogothic Kingdom . However, Belisarius of the Byzantine Empire recaptured Naples in 536, after entering the city via an aqueduct. In 543, during the Gothic Wars , Totila briefly took

33276-399: Was in effect, but usually the Florentine partners ( maggiori , "seniors") and the branch manager would then incorporate a fresh partnership if the manager's performance had been satisfactory. Managers were not paid salaries, but were considered to have invested in the partnership a sum greater than they actually had (for example, in 1455, the Venice branch's partnership agreement was renewed and

33464-419: Was internationally esteemed for its stable value, prestige, and reliability. But Florence's dual coinage system only aggravated the problem. This shift in the monetary system perhaps reflected a systemic slowdown or recession in late medieval Europe in general: the Arte del Cambio's records of member banks record a drastic decline in membership such that the guild fell from 71 banks in 1399, to 33 in 1460, and then

33652-440: Was moving against the young Medici-led resistance (galvanized by the Albizzi government's failure in a war against Lucca and Milan), culminating in Cosimo's exile to Venice. Despite the unfavorable politics in this period of the bank's history, its Italian branches turned in bumper profits, with as much as 62% of the total coming from Rome (in 1427, the Roman branch of the Medici bank had approximately 100,000 florins on deposit from

33840-429: Was not at all concerned about the bank. Instead, he chose to concentrate his time and his family's resources on patronizing artists and pursuing his own poetic and political interests. Eventually, the Medici family's fiscal problems grew severe enough to force Lorenzo to begin raiding Florence's state treasuries, at one point defrauding the Monte delle doti , a charitable fund for paying for dowries . Shortly thereafter,

34028-509: 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,

34216-447: Was only granting the necessary export licenses to foreign-owned enterprises if its members were well-bribed with loans. The London branch of the Medici bank had already been dropped as a full partnership in 1465, and had been reincorporated as an accomando . In 1467, Angelo Tani was dispatched to audit the London branch's books. Tani attempted to step up the collection of outstanding debt—the English king owed 10,500 pounds sterling ,

34404-406: Was sent to investigate in 1438 and favorably reported back that it was incorporated as a limited liability partnership with that son, Bernardo di Giovanni d'Adoardo Portinari (1407– c. 1457), assuming both the position of manager and the majority of the liability. When Angelo Tani (1415–1492) became junior partner in 1455, the branch was finally created as a full and equal partnership in

34592-468: Was that of a single partnership based in Florence, which immutably held the lion's share of shares in each branch (and the three textile factories in Florence), which were themselves incorporated as independent partnerships. At the end of the year on March 24 (by the then used calendar), each partnership would be dissolved, although the Medici could dissolve a partnership at any time with six months' notice. The books were thoroughly gone through and checked, and

34780-448: Was the German Abel Kalthoff . A crucial distinction between the Medici Bank and its older rivals (the Peruzzi , the Bardi , the Acciaioli , etc.) was that its "decentralization" was not merely geographic: it was legal and financial. The Peruzzi bank was taken over by outsiders in 1331 because there was but one partnership , based in Florence and held largely by Peruzzi family members, which owned everything. The employees were only paid

34968-434: Was this branch that established the practice of having a general manager's remuneration be paid through shares in the branch that he purchased with his investment. Also in 1402, the first Medici factory was established for the production of woolen cloth, and then another in 1408. By this point, the Rome branch had established a branch in Naples (closed in 1425 and was replaced with one in Geneva) and Gaeta . It may seem that

35156-411: Was to lift all tariffs on the Medici exporting English wool until such time as the debt was repaid), and the branch had loaned far too much to the Lancastrian rebels (and not to a number of Yorkist loyalists), who would never repay their loans after their deaths and defeats. The London branch finished its liquidation in 1478, with total losses of 51,533 gold florins. The succeeding Tudors never paid off

35344-411: Was undertaken too late. The bank's heavy leverage of their deposits meant that setbacks could be quite sudden. The fact that it seems to have been a common practice for Florentine banks to operate with as little as 5% of their deposits held in reserve lends further support to the idea that collapses could happen abruptly when bad loans were discovered. In addition to all of that, Lorenzo the Magnificent

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