Document Type

Book Chapter

Publication Date


Source Publication

David Fox and Wolfgang Ernst (eds.), Money in the Western Legal Tradition - Middle Ages to Bretton Woods (Oxford University Press)


Banking; Medieval Europe; Medieval continental financier; Pawnbroker; Moneychangers, Deposits, Exchange bankers, Deposit-transfer banking, Financial intermediation


This chapter discusses the evolution of non-cash payment mechanisms in the course of the development of the medieval banking system in Europe. The chapter sets out three categories of a medieval continental financier. The first category, pawnbrokers, consisted of lenders who lent out of their capital primarily for consumption who played no role in the development of the payment system. The second category consisted of moneychangers who accepted deposits and whose practices were rooted in in the manual exchange of coins. The third category consisted of exchange bankers whose practices emerged from the exchange of money in long distance trade. The principal activities of those belonging to the second and third categories were outside the usury prohibitions. The second category of deposit-transfer banking is associated with financial intermediation in the modern sense. Its activity gave rise to book transfers and early cheques. The practices of the third category facilitated the emergence of the bill of exchange and interbank clearing. Building on the flexibility of concepts inherited from Roman law, medieval law provided for the crystallization of the legal features underlying credit and payment mechanisms in Europe.

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