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.
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