The Medici Bank Is Founded in Florence

In 1397, Giovanni di Bicci de' Medici relocated his core banking operations from Rome to Florence, separating his business from his nephew's firm. Partnering with Gentile di Baldassarre Buoni and raising 10,000 gold florins, Giovanni established a headquarters that soon capitalized on the decline of established Florentine financial families like the Alberti. Florence provided greater opportunities for investing commercial capital, particularly after the city acquired the port of Pisa in 1406. Drawing on substantial papal funds deposited with his Roman office, Giovanni built an enterprise that balanced high finance with trade, establishing wool workshops in Florence while organizing commercial networks across the Italian peninsula.

The institution relied on a decentralized structure of legally distinct partnerships rather than a single monolithic firm. Each regional branch operated as a separate entity under a local manager who contributed capital, bore liability, and shared in profits. Following the opening of a branch in Venice in 1402, the enterprise expanded beyond Italy. Offices were established across major European mercantile hubs, including Geneva, Avignon, Bruges, and London. To coordinate this dispersed network, the bank kept its accounts by double-entry bookkeeping, which tracked debits, credits, deposits, and withdrawals across its varied partnerships.