The founder of the Medici Bank in 1397, who established the principles of prudence and the operational framework that led to the family's financial dominance.
A financial institution that accepts deposits and provides loans. The word comes from the Italian banca, the bench or table from which medieval bankers conducted their business.
The quality of being cautious and careful in financial matters, avoiding excessive risk.
The possibility of financial loss in a commercial venture.
An asset pledged by a borrower to a lender to secure a loan.
An accounting method that records every transaction with both a debit and a credit, providing a more accurate and complete view of a business's financial health.
The practice of operating multiple bank locations, often in different cities or countries, all connected to a central headquarters to facilitate the transfer of funds and expand services.
A written order used in long-distance trade that binds one party to pay another a fixed sum.
The practice of conducting banking operations across national borders, which the Medici perfected through their network of branches.
The powerful head of the Medici family who used the bank's immense wealth to become the de facto ruler of Florence from 1434 to 1464.
Financial support given by the wealthy to artists, architects, and scholars. For the Medici, this was both a cultural contribution and a tool for building political influence.
A financial instrument issued by a bank that guarantees a payment to a third party. The Medici used these to facilitate trade and allow their clients to access funds in different cities across Europe.
An Italian mathematician and Franciscan friar who, in 1494, published the first detailed description of the double-entry bookkeeping system, an act that codified the practice and led to his being known as the "Father of Accounting."
An accounting system where every financial transaction is recorded in at least two different accounts—as a debit in one account and a credit in another.
The fundamental accounting equation that is the foundation of the modern balance sheet. It states that what a company owns (assets) is equal to what it owes to others (liabilities) plus what the owners have invested (equity).
Resources with economic value that an individual or company owns. Or: Resources that put money in your pocket.
A company's financial debts or obligations. Or: Resources that take money out of your pocke.
The value of an ownership interest in a business, calculated as assets minus liabilities.
A modern, decentralized digital ledger technology where transactions are recorded in a secure, verifiable, and permanent way across many computers. It is sometimes conceptually referred to as "triple-entry bookkeeping."
Loans that are unlikely to be repaid by the borrower, resulting in financial losses for the lender. A primary cause of the Medici Bank's decline.
A state of uncertainty or unrest in a political system, which can disrupt economic activity and make loans riskier. The bank's deep involvement in politics made it vulnerable to this.
A business structure where ownership is divided into shares of stock, allowing investors to pool their resources and share the risks and rewards of large-scale ventures.
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