Late Middle Ages · Europe · Politics

1345

Bardi and Peruzzi banks collapse in Florence

1345

The two great Florentine banking houses failed when Edward III defaulted on his enormous war loans. Florence reeled. Villani called it 'a worse defeat than the city had ever suffered in war.' Thousands of depositors were ruined and credit froze across the Mediterranean. International credit had become an instrument of war finance, and war had finally broken it.