Public Banks and State Finance in Florence and Venice

Abstract

In the seventeenth and eighteenth centuries the series of wars that Venice fought stimulated the search for new ways of financing, while the few wars that involved Florence did not have the same outcome. Part of the difference in the role of government was the location of banks, which were few and concentrated in the Rialto in Venice, while banks were many and scattered throughout Florence. Venetian rulers asked the bankers directly for short-term loans and advance payments. In Florence, the Officiali del Banco handling government debt often bypassed the bankers. With the establishment first of the Banco della Piazza di Rialto and then the Banco Giro in Venice, moreover, the difference between the two cities became ever wider.