The upper-class Medici family had a history in banking that stretched back to the middle of the 14th Century, although the founding of the Medici Bank is usually dated to 1397 when Giovanni de’ Medici opened his operation in the city state of Florence while maintaining an office in Rome.
Giovanni soon set about developing a close business relationship with Baldassarre Cossa, Pope Boniface IX’s papal treasurer. Meanwhile the Catholic Church was mired in the Western Schism that saw multiple concurrent popes claiming to be St Peter’s rightful successor. As Cossa secured further promotions the Medici Bank was never far away and, following Cossa’s election as Pope John XXIII in 1410, Giovanni’s bank became an important source of loans for the new pope.
Although John was acknowledged as pope by numerous European states including France, England, Bohemia, and Portugal, he was based in Pisa and faced competition from the Roman claimant Gregory XII. Keen to establish his authority, John borrowed thousands of florins from the Medici Bank to finance a military campaign. By January 1412 John had been forced to take out further loans and made the Medici the official bank of the Papacy.
In Rome, Gregory XII was protected by King Ladislaus of Naples who defeated John’s army in 1413 and forced him to sign a peace treaty involving the payment of 95,000 florins. This transaction was, unsurprisingly, again handled by the Medici Bank which went on to become one of Europe’s most powerful and influential institutions during the late medieval period.
