Burn the bankers! was the cry of the 15th-century Florentine crowd protesting against the excesses of the profession at the original Bonfire of the Vanities in 1497, when there was a symbolic burning of 'vain, lascivious, or dishonest' things. This followed the fall of the Medici, the great ruling house of the Italian Renaissance, and the failure of their bank. The similarity to the placards and shouts of the Occupy Wall Street demonstrators in New York is striking, as the impact of the banking crash of 2008 is felt by people who have lost their jobs, their homes and their businesses through the excesses of bankers.
Antipathy towards banks and bankers has persisted through the centuries and periodically manifests itself in popular and sometimes violent expression in times of economic and political uncertainty and fragility.
In a brilliant and illuminating exhibition in the Palazzo Strozzi in Florence, entitled Money and Beauty (to 22 January), the story of the birth of the modern banking system, the alignment of the bankers with the ruling elite and the relationship between art and money is beautifully told and illustrated with some of the most magnificent artworks of the Renaissance.
Florence was the centre of European banking throughout the 14th and 15th centuries. Its Mint launched the florin, which was used all over Europe not only as a coin but as the most popular currency for business transactions. This precursor to the euro brought great wealth and prestige to the city's merchants and bankers for more than two centuries through international trade and lending. It was this wealth that fuelled and enabled the Renaissance, a period of matchless artistic creativity. The exhibition makes clear in no uncertain terms, 'No bankers, no Renaissance'.
However, the bankers of Florence seem to have been troubled by issues of ethics rather more than those of the modern era. The lending of money for cash interest, labelled by the Church as usury, and standing alongside avarice as a capital sin, created problems of morality for these early bankers. Although it is suggested that the Church's objections were based more on an anxiety about social mobility, 'the contamination between the social classes', than on theological concerns.
Bankers and the Church were nothing if not pragmatic. The fact was that people needed loans and it would be foolish to lend to them without a return. The financial sector of the day, a source of innovation then as now when it came to money-making, devised the 'bill of exchange' which enabled florins to be exchanged for local currency in a foreign country without having to risk the actual transportation of money and allowed a modest 10% or 20% charge to be made for the convenience. Thus were the earliest credit instruments of international trade invented, and the 'regulators' in the Church appeased and the consciences of the bankers reconciled. Perhaps it is possible to see parallels with the instruments of the most recent banking crisis, collateralised debt obligations, which, regulators, rating agencies and customers welcomed at first as dispersing and reducing dangerous risk, although these were ulti- mately proved to be destructive sources of financial contagion.
The 15th-century bankers assuaged their guilt by lavish sponsorship of the arts and charity - a kind of latter-day corporate social responsibility. Datini, a prominent lender of the time, established a hospice for abandoned children, while some of the most beautiful paintings of the time were commissioned by the moneymen of Renaissance Florence. They often depicted subjects such as the Coronation of the Virgin, where Mary, in sumptuous and costly robes, is depicted being crowned with gold...
a far cry from the poverty of the stable. In this way, they could appease the Church and their consciences by the devout representation of a religious subject and at the same time demonstrate the rich clothes and ornaments of wealth, perhaps in the hope of attracting clients and creating demand.
Great works by Donatello, Botticelli, Fra Lippi and others were acquired through the financial power of the banks. Patronage, linking economics and art, enabled the bankers to show themselves as men of taste and culture rather than usurers and sinners. Similar, though much less lavish, support is given to the arts by today's bankers, as an examination of the donors to any museum, opera house or major national art gallery will reveal. The difference is that today it is public opinion which must be courted rather than the Church.
However, the latest financial crisis is by far the most serious and widespread ever experienced. No longer are comparisons made with the collapse of the 1930s; this is much worse. No longer is it just banks and businesses that are failing but whole nations risk bankruptcy as the system creaks and groans and politicians scramble to find solutions. Where the fall of the House of the Medici marked the end of the glittering Renaissance, today some commentators are talking of the failure of capitalism itself.
- Baroness Kingsmill is a non-executive director of British, European and US boards. Lady Kingsmill can be contacted on email@example.com