Siena: The Most Ancient Bank in the World
Carved into the stonework of the imposing Palazzo Salimbeni is a name that has been entwined with the fortunes of this Tuscan city for five centuries : Monte dei Paschi, or Mount of the Pastures.
Carved into the stonework of the imposing Palazzo Salimbeni is a name that has been entwined with the fortunes of this Tuscan city for five centuries: Monte dei Paschi, or Mount of the Pastures.
The name derives from the state-owned pastures of the Maremma in the region south of Siena and its income that was guaranteed to the bank’s depositors.
Since the times of the Medici family in Florence, 40 miles to the north, the banking house of Monte dei Paschi has directed wealth on the people of Siena. For 541 years it has endured wars, plague, and famines and it stands today as the world’s oldest operating bank and Italy’s third largest bank.
Founded in 1472 by the magistrate of the city as pawnbroker, the ‘Monte’ offered secure loans to people at a moderate interest with items of personal property used as collateral, an early form of organized charity against money lending.
MPS headquarters hosts an art collection and a large number of priceless historical documents gathered through the centuries of its existence. Its most recent acquisition of art, a gold-plated panel by the Sienese Medieval painter Segna di Bonaventura, was paid one million Euro. This famed collection also includes some intriguing 18th Century pictures of the Palio, already being held in Piazza del Campo.
But beyond the arched entrance of the Salimbeni palace, in 2013 global financial crisis has done what the centuries could not. MPS has been brought to its knees by modern finance and by the fact that in Siena, as in much of Europe, banks controlled by politicians provided loans and jobs in return for votes, and sponsored charitable and civic organizations to gain good will.
Nowhere has the shock been greater than in Siena. For the Sienese the ’Monte’ is much more than a bank. It is called ‘Babbo Monte’ or Daddy Monte, the city’s largest employer and greatest patron. For as long as anyone can remember, its profits have helped pay for charities and civic works, including Siena’s capital annual event, the colorful Palio, the horse race held each summer around the Piazza del Campo.
Indeed, the bank’s largest shareholder, the charitable MPS Foundation, has long operated as a sort of shadow government here. The chief executives are now dismantling the patronage system that prevailed for so long, cutting costs by closing hundreds of branches and getting rid of politically connected officials from the bank’s management. Now everyone wonders what will happen without the Monte’s money...