Medici Bank

Founded in Florence in 1397 by Giovanni di Bicci de' Medici, it became the largest and most respected banking house in fifteenth-century Europe, financing popes, monarchs and the wool and textile trade. Rather than operating as a single unified firm it was structured as a set of semi-independent branch partnerships, each separately capitalised, an arrangement that let Florence's own bookkeepers use double-entry accounting to track each branch's profitability on its own ledger. It relied heavily on the bill of exchange, a credit instrument that let merchants settle debts across currencies and borders while disguising an effective interest charge inside the exchange rate, which let the bank extend credit without technically violating the Church's prohibition on usury. Mismanagement and bad loans to over-extended rulers, especially Edward IV of England and Charles the Bold of Burgundy, brought the bank down by 1494.