During the 14th century, Italian merchant banking houses such as the Bardi and Peruzzi families of Florence developed extensive international networks of branches and agents to finance trade, monarchs, and the papacy. These firms made increasing use of bills of exchange, a credit instrument allowing merchants to settle debts between distant cities without physically transporting coin, building on practices already present in Islamic and Champagne fair commerce. Double-entry bookkeeping methods also developed and spread among Italian merchant firms during this era, improving the tracking of complex transactions. Several major Florentine banking houses collapsed in the mid-14th century after extending large loans to the English crown that went unrepaid.
Relevance to Trade History
Italian banking innovations of this period laid foundations for modern credit instruments and international finance still recognizable in later European commerce.
Read the full story in our article Banking and Credit in Early Commerce.
Source: Encyclopaedia Britannica. See our Sources & Methodology page for how we select and verify references.