Geneva: Geneva before the Reformation: a city of fairs and exchange

Geneva before the Reformation: a city of fairs and exchange

Before it became the “Protestant Rome”, Geneva was a merchant city. This is no historian’s affectation. It sheds light on one of the most enduring constants of the Geneva financial centre: its capacity to live off flows that it does not produce. As early as the fifteenth century, cloth from Flanders, silks from Italy, spices from the Levant and metals from southern Germany passed through the city without having been made there, and it was onto these passages that money-changing, credit and the first banking establishments grafted themselves. Five centuries later, the oil, copper, cocoa and coffee traded from Geneva offices touch the soil of the canton no more than those goods did. The logic nevertheless remains recognisable: Geneva sells organisation, security and trust to exchanges that take place elsewhere.

The first part of the book retraces this prehistory of the financial centre. The first chapter describes the site and the powers that were exercised there, because the geography and the political configuration of medieval Geneva explain to a large extent its role as an intermediary. The second chapter is devoted to the fairs, their goods, their currencies and the instrument that was to transform European commerce: the bill of exchange. The third chapter analyses the economic war waged by Louis XI in favour of Lyon and the decline of the Geneva fairs; from it, the chapter derives a framework for analysing crises of financial centres that will serve as a guiding thread up to the final chapters, which deal with contemporary competition between financial centres.

The reader in a hurry might be tempted to skip straight to Calvin, to private banking or to commodity trading. In doing so, that reader would lose a key to understanding. The mechanisms that made the fortune of the Geneva fairs — accessibility, legal certainty, the diversity of merchant communities, command of currencies and credit — are exactly those on which today’s financial centre founds its promise. And the forces that brought about their decline — the decision of a neighbouring sovereign, competition from a better-protected centre, dependence on a handful of flows — have never ceased to threaten financial centres.

A remark on method is called for at the outset. The economic history of medieval Geneva rests on fragmentary sources: notarial registers, toll accounts and merchant correspondence preserved in Florence, Ravensburg or Lyon far more than in Geneva itself. The Geneva historians of the twentieth century, foremost among them Antony Babel and Jean-François Bergier, reconstructed an overall picture whose broad outlines command consensus, but many of whose figures remain orders of magnitude. The pages that follow draw on this picture and point out, wherever necessary, the points that require verification.

About the book

This part belongs to Geneva as an International Financial Centre by Dr Alexander Ressos, published here in full, section by section.