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D S E Working Paper ISSN: 1827/336X Una fiera senza luogo.Was Bisenzone an offshore capital market in sixteenth-century Italy?Luciano PezzoloGiuseppe TattaraDipartimento Scienze Economiche Department of EconomicsCa’ Foscari University ofVenice No. 25/WP/2006
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Wo rking Pap ers Dep art ment o f Econo mi cs Ca’ Foscari Universit y o f Venice No . 25/ WP/2006 ISSN 1827-336XThe Work ing Paper Seri es is av ailbl e onl y on line cazioniFor edito ri al correspondence, pl ease con tact : wp .ds [email protected] e.itDep art ment o f Econo mi cs Ca’ Foscari Universit y o f Venice Cannaregio 873 , Fond amenta San Giobbe 30121 Veni ce Ital y Fax: ++39 041 2349210Una fiera senza luogo. Was Bisenzone an offshore capital market in sixteenth-century Italy? Luciano Pezzolo University of Venice Giuseppe Tattara University of Venice Abstract This paper discusses how Genoese bankers collected money at exchange fairs. This money was then lent to the King of Spain - through the asientos - from the mid-sixteenth to the early seventeenth centuries. Genoese bankers raised capital at the exchange fairs , which were typical short-term credit mechanism, where foreign bills of exchange were discounted over a three-month period. The Genoese funded long-term obligations by means of short term loans which meant they were able to enforce payment to the King and at the same time successfully manage the supply of finance from a large number of easily substitutable markets, located in different states. The Bisenzone fair of exchange was the forerunner to an efficient, widely integrated international capital market where Genoese pre-eminence was firmly established and which the Genoese kept firmly under their control. The success of the Bisenzone fairs of exchange directly challenges the theory which suggests that the laws against usury restrained the development of capital markets in early modern Italy. Keywords Financial markets, market integration, financial institutions JEL Codes N20, N23, N43 Address for correspondence: Luciano Pezzolo Department of Economics Ca’ Foscari University of Venice Cannaregio 873, Fondamenta S.Giobbe 30121 Venezia - Italy Phone: (++39) 041 2349150 Fax: (++39) 041 2349176 e-mail: [email protected]This Working Paper is published under the auspices of the Department of Economics of the Ca’ Foscari University of Venice. Opinions expressed herein are those of the authors and not those of the Department. The Working Paper series is designed to divulge preliminary or incomplete work, circulated to favour discussion and comments. Citation of this paper should consider its provisional character.