Why did banking develop in Europe?

Answer 1

Prior to the rise of banking, there were the Knights Templar, which, though nominally part of the Church, was a power unto itself. The knights were fighting monks and intimately tied to the Crusades. Apart from that, however, they introduced a series of innovations that produce an extensive banking system, moving money through southern and Western Europe as needed. For example, became possible to deposit money with the order in London and withdraw it in Jerusalem. When the order was disbanded in 1307, an economic power vacuum was created that quickly filled with mercantile operations that evolved into a rather modern banking system. (See link below).

The banks rising in the fourteenth Century were run by powerful families such as the Peruzzi family of Florence, which arose from wealthy merchants. These families were able to rival the nobility and had power all over Europe because of their economic connections. The de Medici family, which was later so important in European politics, did not rise from the nobility, but were bankers whose early sign of success was the opening of their very famous bank in 1397. (see links below).