Buying a passport to heaven: Usury,restitution, and the merchants of medieval Genoa

Historians have argued that the ecclesiastic ban on loans at interest delayed the development of capital markets in the middle ages, and have supported this by pointing to well-documented cases of restitutions of usurious gains by famous moneylenders. Strictly, however, such evidence does not prove that usury laws affected lending, because donations by rich bankers may reflect other motivations. If usury laws had an impact, we have to exclude the Medicis or the Fuggers from the sample, and look for it among the small moneylenders of medieval Europe. Data from late medieval Genoa show that donations by merchants were no greater than those of the population at large once personal wealth is accounted for. However, among merchants the value of pious bequests correlates more closely with mercantile activity than personal wealth, a finding that supports the view that usury laws created an effective constraint on medieval capital markets.