Lugano and Geneva: two confessional economies of credit

Calvin's revision of the usury doctrine

The Geneva volume describes how Calvin's Geneva became a centre of Protestant finance. The contrast with the Catholic south is instructive, provided that it is drawn with precision. Calvin neither invented lending at interest nor freed it from moral control. In a letter on usury written in 1545, he distinguished between two Hebrew terms of the Old Testament: neshek, the interest that "bites" the borrower, which was forbidden, and tarbit, a legitimate increase. Interest could be charged to merchants and others who used borrowed money productively, but not to the poor who borrowed out of need.¹ Calvin thereby abandoned the scholastic argument that money is sterile by nature. He kept the moral criterion of the borrower's situation and the prohibition of exploitation. Geneva translated this position into law by fixing a maximum rate of interest, enforced by the magistrates and supervised by the consistory, which disciplined lenders who exceeded it or who exploited the poor.²

The difference from the Catholic doctrine lay in the legal technique, since the results were similar. Both systems allowed capital to earn a return and both condemned exploitation. Catholic canon law controlled the form of the contract: a return was licit if it came from a censo charged on fruitful land, from a genuine exchange, from a partnership that shared risk or from a title of compensation, and illicit if it was demanded from a loan as such. Genevan law controlled the rate: a loan could carry interest, provided the rate did not exceed the legal maximum and the borrower was not one of the poor. The Swiss historical literature records the same tendency across the Confederation. Redeemable annuities, permitted by papal authority since Martin V in 1425, became the general instrument of credit. Their rates fell from about seven to five per cent in the late Middle Ages. Five per cent became the fixed rate in the early modern period, although rates temporarily fell to three or four per cent or even less in the seventeenth century.³

Two types of capital

The confessional difference had economic effects beyond doctrine. Geneva's financiers of the seventeenth and eighteenth centuries lent to sovereigns, above all to the French crown, through instruments that circulated internationally: bills of exchange, rentes on the Hôtel de Ville of Paris, life annuities and shares in trading companies. The Huguenot diaspora gave them a network of correspondents across Protestant Europe, from Amsterdam and London to Berlin. Their capital was mobile, international and invested in public debt and commerce.⁴ The Catholic capital of the Italian-speaking south was, for the most part, local, immobile and invested in land. It flowed through censi, livelli, benefices and confraternities. Its holders were the Church, its institutions and the families of notables. Its function was the financing of peasants, parishes and households. The emigrant fortunes that returned from Rome, Milan, Turin or St Petersburg were turned into houses, chapels and foundations at home. The pension money of the Catholic cantons flowed into land and offices. Neither produced a banking house comparable to those of Geneva.

The explanation lies partly in confession and partly in other factors. The Reformed refugees of Locarno who went to Zurich in 1555 became merchants and bankers there, as Chapters B.I and B.II show, while their Catholic neighbours who stayed did not. The refugees had lost their land and kept their skills and networks. Their new city offered them a market, legal security and a Protestant community of trust. The Catholic population of the bailiwicks remained subject to twelve cantons that drew revenue from the territory, was excluded from political power and lived in a mountain economy where land was the only secure asset. The confessional factor reinforced these structural conditions without creating them.

Notes

1. Norman Jones, "Usury", EH.Net Encyclopedia, 10 February 2008, https://eh.net/encyclopedia/usury/. ↩
2. Geneva volume; Robert M. Kingdon's studies of the Genevan consistory. ↩
3. Hans-Jörg Gilomen and Anne-Marie Dubler, "Usura", in DSS, version of 18 November 2014, https://hls-dhs-dss.ch/it/articles/017472/ (redeemable annuities permitted by Martin V in 1425; rates falling from about 7 to 5 %; 5 % as fixed maximum in the early modern period; a temporary fall to 3–4 % or less in the seventeenth century, "malgrado i divieti"). ↩
4. Lüthy, La Banque protestante en France (above); see the Geneva volume. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.