Author’s Note

The rapid rise and the equally rapid collapse of the Medici Bank (which was effectively all over in less than a hundred years) is a remarkable story – not least because there are so many parallels with the banking crisis of the present period.

For those who wish to understand these issues in detail, I recommend Tim Parks’ Medici Money for an outstanding and clearly written overview and Raymond de Roover’s The Rise and Decline of the Medici Bank 1397-1494 for a detailed textbook analysis.

What I have tried to do in the series The House of Medici is to tell the story from a human point of view. What was it like to live through these great events, to face the great opportunities offered to successive Medici sons but also to manage the problems that regularly occurred in a rapidly changing world and to suffer the disappointments when people let you down?

And in all of this, to try to answer the question: ‘How did it all go so disastrously wrong?’

In the first book in the series, The House of Medici – Inheritance of Power, we saw how Cosimo de’ Medici faithfully passed on the rules given to him by his father, but at the same time allowed his own actions to break those rules more often than they reflected them.

First, the new partnership structure no longer protected the family from losses incurred within the widely spread branches. Second, Cosimo’s choice of managers broke all his father’s rules of promoting the best and not the family. Third, the new partnership agreements with the branches motivated the branch managers to act foolhardily and in their own local interests. And fourth, slippage in maintaining the bank’s originally strict systems of annual audit meant that the centre did not recognize problems until it was far too late.

It was this slippery slope that Piero inherited.

Unfortunately it was the same with politics. Cosimo had always presented the Medici as commoners, members of the popolani, but his true intentions were visible to those who took the trouble to put aside his words and instead to observe his deeds. He had married Contessina Bardi, the daughter of a count, and later he married his elder son Piero to Lucrezia Tornabuoni.

It turned out to be one of his greatest mistakes, as this second book, The House of Medici – Seeds of Decline , tries to show.

Cosimo tried to protect the family’s future from the weakness he could see all too plainly in Piero. First, he tried putting his second son Giovanni in charge of the bank. Second, he hid a fortune – Lorenzo’s Gold, 200,000 Florins (£24 million in today’s money) – deep beneath a convent in order to give his grandson the opportunity to salvage something from the mess he knew Piero would inevitably leave behind. And finally, in a feeble attempt to prop up his son’s weaknesses, he forced Lucrezia Tornabuoni to marry Piero.

Lucrezia was one of the outstanding women of her age, not only a poet but a successful businesswoman in her own right, owning shops and a hotel in Pisa and the medicinal baths at Bagno à Morba, south of Volterra, which she personally redeveloped into a thriving business. Uncomfortably for both of them, she was considerably brighter and more able than Piero. Not only that, but (as Cosimo was fully aware) she was in love with his younger brother – her childhood hero Giovanni.

What Cosimo was not to know was that in her resentment over her marriage, Lucrezia would bring up her precocious son Lorenzo in direct opposition to the Medici Creed. She could see through both facades. She understood partnership agreements, selection and recruitment of managers, contracts, motivation and financial controls. It was obvious to her that the bank was on the slide.

She also understood that the Florentine Republic was an unsustainable pretence, a dream that had never really existed as the mirror of classical democracy that the priors told each other they were presiding over. The system of checks and balances that they had built into the rules two hundred years before had always acted as a constraint on effective government to the point of stifling good administration. And while they told themselves that the city state maintained itself financially, proudly refusing to allow any one individual to bear the burden of expenditure for fear he should become ‘a Great Prince’, the truth was that during his lifetime Cosimo had spent 660,000 Florins (today worth £75 million) on great municipal projects and propping up the city’s finances, and secretly they all knew it.

Lucrezia could see that, generous a gift as Lorenzo’s Gold might be, the task Cosimo was implicitly asking his grandson to achieve with it was an impossible one. Instead she used all her power openly to make him Lorenzo the Magnificent, a Great Prince; one who forced through change and who, by blurring the boundaries between personal and state expenditure, progressively pushed the burden back where it belonged. Unfortunately, much of that blurring had questionable legality. And at the same time, between them, they were letting the family bank go to the dogs.

Yet in addition to all her temporal abilities, Lucrezia was also a very devout woman. As she approached the end of her life she began to worry about the legality – and perhaps as important – the morality of what she had led Lorenzo to become. She had acted in what she thought was the appropriate manner – guiding her son to pursue reality not dreams, but in the process, what had she created? How would she finally be remembered? What would be her epitaph when finally her life was over?

And then there was her son. Lorenzo the Magnificent himself. What would be the outcome of his life after she was gone? How would he be remembered? As a great leader, who guided Florence through adversity to eventual triumph? Or as a domineering ogre who would stop at nothing to get his own way? Would Lorenzo regret his actions as he too approached the end of his life? And would he, in those dying days, thank her for what she had led him toward?

Only time would tell. But that, as they say, is another story; a story told by The House of Medici – Decline and Fall.