Lombard banker

A Lombard banker is a moneylender who offers loans in exchange for some collateral. The term originated with the Italian bankers from the region of Lombardy who spread across Europe during the Middle Ages; these bankers were established in Paris under the auspices of the Knights Templar, eventually lending their name to the Rue des Lombards.

A Christian prohibition on profit from money ‘without working’ made banking sinful. Though Pope Leo the Great forbade charging interest on loans by canon law, it was not forbidden to take collateral on loans. Lombard bankers 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 sale-repurchase by the ‘borrower’ where the interest is implicit in the repurchase price. As no economy or money-based society can prosper without any credit, various ways around the prohibition were devised, so that the lowly pawnshop contractors could bundle their risk and investment for larger undertakings.


Lombard banker

Le Ballet de l'Acier Black_Vulmea