19. The leading Florentine banking institutions, the largest and most powerful economic forces in Europe, underwent a calamitous implosion in the 1340s
During the early-13th century, the Republic of Florence was the center of European banking and finance, providing capital to the most powerful rulers of the continent including the Kings of England and France. The Peruzzi was the second largest banking consortium in Europe, enjoying fifteen branches from London to the Middle East and a capitalization of more than 100,000 gold florins, whilst the Compagnia dei Bardi was the greatest, more than fifty percent larger than the Peruzzi. Together, acquiring and maintaining diverse trading networks throughout the world, these companies engaged in what today is known as commodities speculation and high-risk capital loans to facilitate economic activity.
However, unsecured loans to powerful individuals and commodities trading inherently runs the risk of catastrophic failure. In 1343, the Peruzzi consortium suddenly collapsed, suffering a critical drainage of liquid capital and within just two years declared bankruptcy. Suffering from the same economic conditions, with war between France and England in Aquitaine among other harmful factors, the Bardi equally deteriorated and ceased to serve as the foremost institution. It has been alleged the delinquency of Edward III of England was heavily to blame, with Giovanni Villani claiming the monarch owed as much as 900,000 gold florins to the Bardi and 600,000 to the Peruzzi.