Lombard banking

Lombard lenders became active throughout Western Europe in the 13th and 14th centuries, emigrating from major merchant centers in Tuscany such as Florence, Lucca and Siena,[1]: 63  and in Northern Italy such as Milan or Genoa but also from smaller cities such as Asti in Piedmont.

In some regional contexts, the two words "Lombard" and "Cahorsin" were used interchangeably until the latter gradually fell into disuse from the 14th century.

Pawn shops thus could operate on the basis of a contract that fixes in advance the "fine" for not respecting the nominal term of the "interest free" loan, or alternatively, may structure a repurchase agreement by the borrower, where the interest is implicit in the repurchase price.

Various ways around the prohibition were devised, so that the lowly pawnshop contractors could bundle their risk and investment for larger undertakings.

The necessity of credit for functioning European economies was such that the Church's ban on usury was routinely undermined, "Despite the ban on usury, no medieval European government - municipal, territorial, or national - was able to function without borrowing...But such loans were usually for short terms, often at punitive rates of interest".