The Branch Bank
The bank that began in 1397 pushed out to Venice (1402), Geneva (1435), Bruges (1439), London and Avignon (1446), and by the middle of the fifteenth century was the most sophisticated in Europe. It was not, however, one bank. Each branch was a separate partnership with its own contract, its own capital and its own books, and branches dealt with one another on the same terms as outside counterparties. Branch managers were given a small stake so that they had skin in it. So when London went down, Rome's debts were not automatically dragged with it. The distributed structure of the modern multinational was designed six hundred years ago. The prohibition on interest was solved with the bill of exchange: money borrowed in one city was repaid in another, in another currency, at a rate set in advance in the bank's favour, so the real interest sat inside the spread. The irony is that the bank's largest depositor was the papal Curia — the institution that forbade interest. The ending is equally clear. After a successor lifted the founding rule against lending to princes and governments, the London branch closed in 1472 on soured loans to Edward IV, and the Bruges branch was wound up after unsecured lending to Charles the Bold of Burgundy cost more than a hundred thousand florins. The money that carried the Renaissance began to thin out at exactly the point where its keepers broke their own rule.