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Sub-prime loan to Ricciardis circa 1294; city view.


When you find yourself in times of trouble it's nice to step back and take a historical view of things.

Take the credit crunch. First itwas the worst things had been since the 1990s.

Then it was the worst things had been since the great depression. God knows where you'd have to go to for the next worse comparison.

Well, actually, a team of cleverclogs at Reading University have found the answer.

1294. That's right, 1294. In the same year as the death of the mighty KublaKhan (God bless the internet), the English government was struggling with its own version of ye olde credit crunch.

Of course the Government wasn't much of a thing back in those days of divinerule, consisting mainly of a bunch of fawning yes-men ruled with an iron fist by an unelected autocratic bully.


But anyway, it's true, according to the team at Reading.

Not only did the peasants of the time have to deal with war, famine and the Black Death, they had to deal with the harsh realities of a recession, although at least they were probably spared the sight of Robert Peston on the telly all the time.

Lecturer Adrian Bell says events 700 years ago would have looked quite familiar to anyone familiar with the finance pages of recent times.

There was the sub-prime borrower (the King), a lack of liquidity and runs on the bank, eventually resulting in the seizure of foreign assets and international turmoil.

It all began when Edward I, of Patrick-McGoohan-in-Brave heart fame, wanted to call in money lent with the Ricciardi family, the Northern Rock of their day, to pay for a planned war with France.

The unfortunate Ricciardis couldn't pony up the cash, so Edward seized their assets in the UK, making the crown a sub-prime risk.

Everyone financially involved with the crown soon became panicky and started pulling their money out of banks left right and centre, causing chaos before things eventually stabilised.

Reading about all this puts things in perspective and might even provide a bit of comfort to people fearing the end of the world in our own financial chaos - it's nice to see some things never change.

And, just as a bit of food for thought, another example of Medieval monetary policy. A few years after the English credit crunch, King Philip IV of France found he owed an embarrassingly large amount of money to the Knights Templar.

So the impecunious monarch had the whole order rounded up and burnt at the stake as heretics.

That's a bit of an extreme solution today, although don't rule it out if the banks refuse to start lending.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Jan 7, 2009
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