The house of Medici also called Medici family was a family in Italy that ruled over Florence since around 1434 to around 1737. They originally gained wealth and political power in Florence through the achievement they made in commerce and banking. The family for a long time maintained the banking business at increasing rate and the source of money being land holdings that were at Mugello region that was in north of Florence. The family were not only involved in banking activities but also played a great role in financial accounting. This paper will discuss the achievement the Medici family made to the evolution of international banking.
The Medici family participated in foreign exchange; through these they created branches in big trading centre. By these they could offer exchange and also providing lending services to their client. Through these they were trusted by money because it was the only way that money would be given at the lowest rate in return merchants participated in the lending activities. By these people became aware of this activity and started this activity hence brought about international banking.
Since wool and cloth industries were the main manufactures of the Florentine for between 14th and 15th century the Medici bank lend the money at a very low interest and by this they were able to expand the industries with the export. Therefore a lot of company could do this not necessary those from within Florence but even country such as Europe and many other country
Apart from money exchange that other banks participated Medici were also involved in time deposit that was far much better in many ways. They did these by lending their money to institution which in return will pay back the money with an interest which was not accepted but they could do it secretly. Through this the Medici country was able to grow for many people to go on lending from them. It therefore made people to be aware and started doing that.
The family made sure that their customers were not put into much pressure when they were supposed to return the money that they had lend. By doing these it encouraged many investors to do business with them. Many investors from various country were comfortable has they were given time to do their business by the money they were lent after which they would return the money after their businesses were stable.
They provided war mercenaries to support various wars. Since most of the country could be caught unaware they had to look for ways to get the weapons t enable them defeat their rivals therefore they had to look for a place they could get money at a very low rate and therefore lent money from Medici bank. They did this not only to the country they came from but across the borders therefore leading to evolution international banking.
Through this we can see that this family did a lot to the evolution of international banking. They did these by providing money that were used to purchase weapon used in wars by various country, opening branches across major town with the main branch being in Florence, providing financial support in the aid of wool and cloth industries, being understanding to their clients and also involving in time deposit. Through these they were able to encourage many to come up with international banking because the end result was profitable that any other individual or even group would desire.