Banking

Abstract

In 1340, Edward III, King of England, defaulted on his debts to the two great banking families of Florence – the Bardi and the Peruzzi – thereby reducing these families to bankruptcy: the Peruzzi in 1343 and the Bardi in 1346. 1 As with the Bardi and the Peruzzi in Florence at the beginning of the 14th century so, at the beginning of the 21st, with Lehman Brothers in the USA, the Northern Rock in Britain, and the Anglo Irish Bank in Ireland: defaulting borrowers caused their bankruptcy and, in turn, their bankruptcy led their countries’ economies to tremble and totter. The difference between the intervening centuries was that Edward III ran up debts in pursuit of a long war with France while defaulters of the 21st century were more into bricks and mortar.