Royal Insolvency: The Collapse of the First Banking Empire. Debt, War, and the Brutal Sovereign Default in Medieval Florence, 1340–1345

Long before the Medici rose to power, the European economy was controlled by two Florentine families. The Bardi and Peruzzi superbanks funded trade, popes, and monarchs through a highly complex, unprecedented network of early credit and international ledgers. But their magnificent business model contained a fatal, irreversible flaw: lending money to absolute monarchs. To finance the brutal opening campaigns of the Hundred Years' War, King Edward III of England borrowed astronomical sums from both financial houses.
When the war drained his treasury, Edward simply refused to pay them back. This economic history exposes the eternal danger of lending to entities that write their own laws. Because a king cannot be sued or repossessed, the banks instantly became insolvent, triggering a devastating financial contagion across medieval Europe. Understand the violent birth of sovereign debt crises. Discover how the arrogant stroke of a monarch's pen destroyed centuries of generational wealth and plunged a continent into economic darkness.