The World’s First Modern, Public Bank
18 Apr 09 | FT
On March 2 1408, eight men gathered in the great hall of the Casa di San Giorgio, a trading house on what was then the main street in Genoa, a few metres from where the waters of the Ligurian Sea lap the Italian shore. They were merchants, rich and powerful representatives of the city’s most influential families, and they were meeting to discuss a matter of the utmost gravity. The once-glorious republic of Genoa had fallen on hard times. After years of war with Venice and a crushing defeat at the battle of Chioggia in 1381, the state was effectively bankrupt. The task was to rescue it.
A few months earlier, towards the end of 1407, Genoa’s Council of Ancients had authorised the Casa di San Giorgio to carry out this job. It would be accomplished by creating a bank that would facilitate the repayment of Genoa’s debts in return for interest at 7 per cent and the right to collect taxes and customs owed to the city. The purpose of the meeting that spring day was to declare the Banco di San Giorgio open for business.
The great hall, an enormous room on the first floor, is part of the Casa di San Giorgio’s original building that survives today. It is lined by a gallery of statues of the founders of the Casa and their successors, who, to all intents and purposes, were the forerunners of today’s merchant bankers. Literally, they were merchants who made themselves bankers. At least one of them – Rabella de Grimaldis – was a member of a dynasty that survives to this day. The Banco di San Giorgio would, in time, become as powerful as the republic that created it – more powerful, according to Niccolò Machiavelli. It would survive for nearly 400 years. It would become the world’s first modern, public bank, not just a forerunner of the Bank of England but its prototype. From the 15th to the 18th century its coffers were filled with the riches of Genoese capitalists all over Europe. Christopher Columbus, Genoa’s most illustrious son, would be a customer.
Given its origins, purpose and longevity, one would expect the Banco di San Giorgio to be more celebrated than it is. Yet almost nobody today knows what it did, or that it existed at all. >>>