Having recently spent a long weekend in Siena I've returned to Britain with a head full of information and thoughts about this most alluring of Italian cities. Disentangling this lot has given birth to several blog posting ideas so in the next few months I've decided to hit the computer keys with postings about Siena topics I've thought about and researched since I got home. As Winter approaches here in Lincolnshire - it's a perfect way to transport myself back to warmer climes and beautiful cityscapes if only to provide substance to some of the things I've seen and been thinking about. It's not all "feel good" stuff though.
This posting is about Italy's oldest bank - the Banca Monte dei Paschi di Siena.
Our long weekend in Siena involved a stay at an interesting hostelry outside the city walls converted from an early 20th century villa in to a hotel in the 1960's. It had a huge and fabulous terrace overlooking the old town on the hill top opposite and it was a perfect location to plan our activities for the weekend.
On the first day we decided to walk in to the old town and this involved a 25 minute stroll down a road largely lined by 20th century buildings - offices, hotels , shops and the like until we reached the Porta Comollia - one of the medieval gateways in to the old city.
We were entering the old city through the gateway on the road from Florence and originally built in the 13th century this three arched structure was imposing. It was evidently razed to the ground during the siege of Siena in 1555 and rebuilt after that. The sculptural coat of arms above the central arch, a heraldic coat of arms of the Medici family who controlled this part of the Tuscany in the 17th century, was added in 1604. Passing through this historic gateway we entered the contrada of Istrice, one of Siena's seventeen contrade and as we strolled down the medieval street towards the main square I wondered if it had played a significant part in this year's Palio - the city's celebrated horse race. Had the Istrice horse with liveried rider based on the colours seen in the flag above been victor in either of the races held the Campo in July and August this year? I made a mental note to check later on.
As we ambled down the atmospheric street stopping to look in various shop windows I thought of our visits to the Tuscan villages of Cetona and Sarteano the week before. Each is very close to where we have our place for they are on the other side of the valley from our apartment in Citta della Pieve. I visualized the small local branches in each of Siena's famous bank -the Banco Monte dei Paschi di Siena. Having studied the map of our route walk in to the city centre I knew that at the bottom of the Via Montanini we were about to come upon its headquarters and I was looking forward to it.
On our left we came then to the Piazza Salimbeni in what was the heart of commercial Siena during the medieval and Renaissance periods. There were three buildings here of architectural interest and today all three of them form the headquarters of the Monte del Paschi bank. The one in the middle, the Palazzo Salimbeni and the original headquarters building of the bank, was constructed in the 14th century and is in a gothic domestic style with pointed arched windows at second floor level. The building was heavily restored in the 19th century with additional details added taken from those found on the nearby Palazzo Pubblico in the Campo.
On the right is a wonderful Renaissance Palazzo built in 1473 and not dissimilar to the Palazzo Strozzi in Florence. The rusticated base and projecting cornice near the roof line are particularly distinctive, the latter complete with projecting heads of various Roman Emperors. The building belonged to Ambrogio Spannochi, who had been appointed Treasurer to Pope Pius II who came from the Siennese Piccolomini banking dynasty.
This Palazzo stands opposite a third building, the Palazzo Tantucci, which is much more classical in appearance and later in date. It was commissioned by Mariano Tantucci in 1548.
The square was remodelled in the 19th century and this involved removing a garden in front of the Salimbeni Palace to make the piazza. A statue of a Sienese priest, Sallustio Bandini and one of Italy's first economists was placed in the square in 1882.
This square, with three magnificent buildings arranged round it, presents to the viewer an interesting case study in the history of medieval/ Renaissance secular architecture and its well worth spending a short time here to study the palazzi details. The buildings, over the centuries have stood for the permanence, stability and steadfastness of Sienese banking institutions inspiring confidence in all who use them - but not so today sadly!. On returning home I was keen to find out more about the history of the famous bank that started right here on this site, but which has recently been the subject of much discussion in the media - for all the wrong reasons.
As one of the most important city's in central Italy in the medieval period Siena's rise to prominence was based on two things - trading in commodities such as wool, wine, saffron and spices and banking. Between the 13th and 14th centuries a number of families developed banks focused on local activities at first and headquartered in Siena but eventually many of them with branches all over Europe. These included the Tololmei, Piccolomini, and Bonsignori families and they became very rich from what were then innovative activities based on money-lending and currency exchange. At one point Sienese banks controlled the Papal finances and collected all the tithes destined for the Holy Land.
The Banca Monte dei Paschi di Siena is the oldest surviving bank in the world, founded in 1472 by a city magistrate Monte di Pieta as a "Mount of Piety"and its been doing business continually ever since. It was created with an underpinning statute of 1419 entitled "Statuto dei Paschi" which set out to regulate banking activities associated with agriculture in the Maremma area. In modern times it really dates to 1624 when Siena was finally made part of the Grand Duchy of Tuscany. The then Grand Duke - Duke Ferdinando II, granted to depositors of Monte, the income of the state owned pastures of the Maremma - the so called Paschi which gave the bank its name. During the 17th and 18th centuries the bank both consolidated and expanded its activities and in the mid 19th century, with the Unification of Italy, it expanded its activities throughout the country.New financial services included the granting of mortgages on properties - a new banking activity for the Italians at the time.. In 1995 the government created two separate institutions - a banking arm the Banca Monte dei Paschi di Siena S.P.A and the Fondazione Monte dei Paschi di Siena - a non-profit organisation designed to provide assistance to charities and organisations concerned with education, science, health and art especially concerning the local Siense community.
In the run up to the financial crisis of 2008 the banking arm of the business, like so many others in Europe and America, began a period of unparalleled expansion taking over various regional banks as well as expanding its interests in the fields of personal loans and investment banking. A whole trench of new branches were opened, To finance the expansion - wait for it - the bank entered in to the field of concealed derivatives through Operation Santorini in 2002 and Operation Alexandria in 2006.
For a variety of reasons the bank has performed badly in recent years despite two recapitalizations by the government. Essentially its become yet another bank with a catalogue of bad debts caused by lax lending standards, political interference and poor management. Rock bottom profitability and the bad debts have caused a collapse in confidence amongst new private investors and the bank has been for sale since 2014 with no one wanting to buy it. Various commentators have signalled there is no future for the bank without further public money being used to bail it out and eliminate the bad debt problem once and for all. But there's another issue which takes the problem into another dimension.
New European Community rules state that no public money can be used to bail out a bank until private investors have been wiped out first. MPS, interestingly reflecting its deep routes as a community based bank, has a large number of small private investors who hold MPS bonds - they would be the first to suffer if these rules are adhered to and these small investors are targeted first.
I'm not sure where the situation stands today. In September trading of the oldest bank in the world's shares and Italy's largest lender was suspended after the shares slid 6% over concerns about weak investor interest in its latest emergency rescue plan. All of this of course may impinge on the upcoming Renzi referendum in December, where a NO vote on government reforms could trigger a fall in the government and another escalation of the financial crisis facing Italy's banks.
I found myself fascinated but not surprised to discover that the world's oldest bank, rooted in fine traditions and serving the community for centuries, has gone down a similar path to our own Royal Bank of Scotland in Britain - another fine institution blighted by the recklessness of fat cat executive bankers. What a world we live in! To lose faith in our banks is surely a sign of a broken and crumbling system and again I can't help thinking of small bank customers here in Britain and in the small towns of Italy being made to pay the price for policies based on these gross and distorted values??? We can visit Siena as tourists and admire the fine architecture of these mighty financial institutions, but in the full knowledge of the fact they no longer represent the values that underpinned their design and construction in the first place. Sad!!!
Caio & KBO
Ian
P.S. - Oh - and by the way the contrada of Istrice, the porcupine, hasn't won the Palio since 2008. In August it was the contrada of Lupa the wolf that took the crown.
This posting is about Italy's oldest bank - the Banca Monte dei Paschi di Siena.
Our long weekend in Siena involved a stay at an interesting hostelry outside the city walls converted from an early 20th century villa in to a hotel in the 1960's. It had a huge and fabulous terrace overlooking the old town on the hill top opposite and it was a perfect location to plan our activities for the weekend.
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| VIEW OF SIENA FROM THE TERRACE OF THE GARDEN HOTEL |
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| SIENA'S NORTHERN PORTA COMOLLIA GIVING ACCESS TO THE ISTRICE CONTRADA |
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| THE FLAG OF THE ISTRICE CONTRADA - SIENA WHICH INCORPORATES A PORCUPINE IN A CENTRAL ROUNDEL |
As we ambled down the atmospheric street stopping to look in various shop windows I thought of our visits to the Tuscan villages of Cetona and Sarteano the week before. Each is very close to where we have our place for they are on the other side of the valley from our apartment in Citta della Pieve. I visualized the small local branches in each of Siena's famous bank -the Banco Monte dei Paschi di Siena. Having studied the map of our route walk in to the city centre I knew that at the bottom of the Via Montanini we were about to come upon its headquarters and I was looking forward to it.
On our left we came then to the Piazza Salimbeni in what was the heart of commercial Siena during the medieval and Renaissance periods. There were three buildings here of architectural interest and today all three of them form the headquarters of the Monte del Paschi bank. The one in the middle, the Palazzo Salimbeni and the original headquarters building of the bank, was constructed in the 14th century and is in a gothic domestic style with pointed arched windows at second floor level. The building was heavily restored in the 19th century with additional details added taken from those found on the nearby Palazzo Pubblico in the Campo.
On the right is a wonderful Renaissance Palazzo built in 1473 and not dissimilar to the Palazzo Strozzi in Florence. The rusticated base and projecting cornice near the roof line are particularly distinctive, the latter complete with projecting heads of various Roman Emperors. The building belonged to Ambrogio Spannochi, who had been appointed Treasurer to Pope Pius II who came from the Siennese Piccolomini banking dynasty.
This Palazzo stands opposite a third building, the Palazzo Tantucci, which is much more classical in appearance and later in date. It was commissioned by Mariano Tantucci in 1548.
The square was remodelled in the 19th century and this involved removing a garden in front of the Salimbeni Palace to make the piazza. A statue of a Sienese priest, Sallustio Bandini and one of Italy's first economists was placed in the square in 1882.
This square, with three magnificent buildings arranged round it, presents to the viewer an interesting case study in the history of medieval/ Renaissance secular architecture and its well worth spending a short time here to study the palazzi details. The buildings, over the centuries have stood for the permanence, stability and steadfastness of Sienese banking institutions inspiring confidence in all who use them - but not so today sadly!. On returning home I was keen to find out more about the history of the famous bank that started right here on this site, but which has recently been the subject of much discussion in the media - for all the wrong reasons.
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| PALAZZO SALEMBINI - 14TH CENTURY HQ OF THE BANCA MONTE DEI PASCHI DI SIENA |
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| PALAZZO SPANNOCHI - 1473 |
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| PALAZZO TANTUCCI - 1548 |
The Banca Monte dei Paschi di Siena is the oldest surviving bank in the world, founded in 1472 by a city magistrate Monte di Pieta as a "Mount of Piety"and its been doing business continually ever since. It was created with an underpinning statute of 1419 entitled "Statuto dei Paschi" which set out to regulate banking activities associated with agriculture in the Maremma area. In modern times it really dates to 1624 when Siena was finally made part of the Grand Duchy of Tuscany. The then Grand Duke - Duke Ferdinando II, granted to depositors of Monte, the income of the state owned pastures of the Maremma - the so called Paschi which gave the bank its name. During the 17th and 18th centuries the bank both consolidated and expanded its activities and in the mid 19th century, with the Unification of Italy, it expanded its activities throughout the country.New financial services included the granting of mortgages on properties - a new banking activity for the Italians at the time.. In 1995 the government created two separate institutions - a banking arm the Banca Monte dei Paschi di Siena S.P.A and the Fondazione Monte dei Paschi di Siena - a non-profit organisation designed to provide assistance to charities and organisations concerned with education, science, health and art especially concerning the local Siense community.
In the run up to the financial crisis of 2008 the banking arm of the business, like so many others in Europe and America, began a period of unparalleled expansion taking over various regional banks as well as expanding its interests in the fields of personal loans and investment banking. A whole trench of new branches were opened, To finance the expansion - wait for it - the bank entered in to the field of concealed derivatives through Operation Santorini in 2002 and Operation Alexandria in 2006.
For a variety of reasons the bank has performed badly in recent years despite two recapitalizations by the government. Essentially its become yet another bank with a catalogue of bad debts caused by lax lending standards, political interference and poor management. Rock bottom profitability and the bad debts have caused a collapse in confidence amongst new private investors and the bank has been for sale since 2014 with no one wanting to buy it. Various commentators have signalled there is no future for the bank without further public money being used to bail it out and eliminate the bad debt problem once and for all. But there's another issue which takes the problem into another dimension.
New European Community rules state that no public money can be used to bail out a bank until private investors have been wiped out first. MPS, interestingly reflecting its deep routes as a community based bank, has a large number of small private investors who hold MPS bonds - they would be the first to suffer if these rules are adhered to and these small investors are targeted first.
I'm not sure where the situation stands today. In September trading of the oldest bank in the world's shares and Italy's largest lender was suspended after the shares slid 6% over concerns about weak investor interest in its latest emergency rescue plan. All of this of course may impinge on the upcoming Renzi referendum in December, where a NO vote on government reforms could trigger a fall in the government and another escalation of the financial crisis facing Italy's banks.
I found myself fascinated but not surprised to discover that the world's oldest bank, rooted in fine traditions and serving the community for centuries, has gone down a similar path to our own Royal Bank of Scotland in Britain - another fine institution blighted by the recklessness of fat cat executive bankers. What a world we live in! To lose faith in our banks is surely a sign of a broken and crumbling system and again I can't help thinking of small bank customers here in Britain and in the small towns of Italy being made to pay the price for policies based on these gross and distorted values??? We can visit Siena as tourists and admire the fine architecture of these mighty financial institutions, but in the full knowledge of the fact they no longer represent the values that underpinned their design and construction in the first place. Sad!!!
Ian
P.S. - Oh - and by the way the contrada of Istrice, the porcupine, hasn't won the Palio since 2008. In August it was the contrada of Lupa the wolf that took the crown.
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