II. Historical Development

The roots of the modern Western banking and finance system: Bill of exchange at the fair 14)

• During the 15th and 16th century the first substitute for money (surrogates) was developed. Bills of exchange became payable at the next fair (e.g. promissory notes, purchase and transportation contracts). Credit and finance transactions became easier and less risky.
• Political and clerical institutions used the fairs for their transactions: The German bishops paid their contributions to the curia in Rome via the Champagne fairs.
• Until 1320 Champagne fairs became finance centres of Western Europe. The reasons for decline are: Change of traffic network, maritime traffic, settled merchants, war between Flanders and France, competition of the central and south European fairs.
• For further information see additional link.