High Finance, Banking and Small-Scale Moneylending: A New Trinity of Financial Functions for Lombards in the Late-Medieval Low Countries ?
Abstract In this paper, we argue that within the late medieval Low Countries Piedmontese moneylenders offered their clientele a “trinity” of financial services: a stake in high finance undertakings, banking facilities and small credit transactions. To demonstrate this thesis, we use two complementary methods. First, we study the commercial strategies of Piedmontese banking societies with respect to their lending patterns in various regions. Second, we analyse their position in the public finances of two major cities of the Low Countries — Mechelen and Mons. We show that they fulfilled an important function as capital providers in both the private and the public credit sectors, allowing for a steady credit supply and probably contributing, on a short-term basis, to money supply in times of silver scarcity or famine shocks. We argue finally that these banking societies’ interest rates ought to be considered, not on a yearly basis, but rather on a weekly basis, which more accurately reflects medieval trade credit practices.
Keywords Public finances, financial intermediaries, interest rates, banking, high finance