Medici Family History

Through the Medici Party and many other established connections, the successful Medici leaders controlled the European Economy in the 15th Century. The Medici Family, originally from Mugello, a small, rural town, rose from simple beginnings to rule Florence (Cesati 19). The first ruler, Giovanni di Bicci de’ Medici, moved a small Roman Bank Branch to Florence in order to utilize the possibility for expansion and investments (“Medici Bank”). After the death of Giovanni, Cosimo de’ Medici, took control of the bank and expanded the trade by capitalizing on wool and cloth industries and opening up deposit accounts and bills of exchange (“Medici Bank”). Cosmo’s power derived from his great wealth as a banker, his patronage of the arts and success …show more content…
A careful examination of the Bruges Bank had been conducted to find where the extra funds came from. The Examination proved that the Florentine Branch financed the Bruges Bank, by under distributing the profits that had been due to the monetary investors of the Florentine Branch and money held on deposit for outsiders and partners (Roover 69). The Florentine Branch cheated the investors of the Bank, which infuriated the main investors, however attracted the power, wealthier with their promise of making money even with the risk. The Medici Bank attracted the wealthier individuals by using their organization of their transactions of the usury and the continuous special services offered with the large deposit accounts, and large loans and bonds (Ghosh). Many outsiders had deposit accounts with the Medici bank, however these outsiders are prominent Florentines; nobles and statesmen. The wealthy individuals did not invest all the money in estates or any mutual society. The Investors (Outsiders) decided to invest because of the high record of return in the deposit accounts and the many special services offered with the wealthy individuals (Roover 70). Even though they returned a quite bit of the money invested in the bank to the investing partners, the Medici Family kept most of the money within the family for personal needs. 90% of the profit came from banking, surplus from financial operations. The Medici Bank became known as the “largest floating capital of the world,” (Ghosh, Genesis of High Finance Pg. 1). The Medici owed quite a bit of thanks to the religious leaders (popes and priests) because the volume of the cash flow continued to increase, and the power of the church had been mobilized thanks to the donations and interest (Ghosh). Even though the wealthier individuals continued