By Peter Konieczny
A curious anecdote has been roaming around the Internet for the last few years: apparently, if you were a banker in medieval Catalonia and you went bankrupt, you could be executed. It was no idyll danger either – one banker was beheaded for this in 1360. What is the story behind this unusual execution?
The story has appeared in numerous social media posts, including Twitter/X and Reddit, as well as in a few online articles. A typical post said this:
In medieval Catalonia, bankers who became bankrupt were publicly disgraced by town authorities, and given nothing but bread and water to eat until creditors were paid off – After a year, if bankers failed to paid, they would be beheaded & their property sold off to pay them.
Other posts add a second detail: that a banker named Francesc Castello was actually executed for this infraction in 1360. Could this be true?
The short answer is yes. You can track this information to a book from 1943: The Early History of Deposit Banking In Mediterranean Europe, by A.R. Usher. Usher’s research on medieval banking led him to explore the regulations of the Catalonian city of Barcelona. Starting in the year 1300 a series of laws were issued by the local government regulating money changers, the forerunners of bankers. These men were often merchants themselves and they would make loans to others, often tied to commercial ventures. By this point they were also taking deposits from other people, who hoped to earn a share of the profits from these loans.
While being a money changer / banker could earn you a fortune, it also had risks. A loan to a shipmaster to go buy goods from another port often ended with a good return on investment, but the ship could also sink during the voyage, be captured by pirates, or just find that the goods they wanted were no longer available.
For the city authorities of Barcelona, these risks were not to be shared with any depositors. They made strict laws on how these bankers would conduct their business, including this one from the year 1300 on what happened if one did go bankrupt:
No money changer who may hereafter fail, and none who has recently or in times past failed, shall again keep a bank or hold any office under the crown. Any such shall be proclaimed bankrupt and disgraced by public crier throughout the city of Barcelona and also in the place in which he had his office. Until he shall have satisfied all demands, he shall be detained on a diet of bread and water.
In 1321, this law became even stricter: if the banker did not return the money owed to his depositors within a year, then he could be executed by beheading, and then have all his property seized and sold off to pay his debts.
In medieval Catalonia (Spain), bankers who became bankrupt, were publicly disgraced by town authorities, and given nothing but bread _ water to eat until creditors were paid off. After a year, if bankers failed to paid, they would be beheaded & their property sold off to pay them pic.twitter.com/JpMDUCkItB
— ArchaeoHistories (@histories_arch) November 7, 2022
Usher found these laws in Barcelona and other Catalonia towns to be very interesting, as they were apparently in place for generations. Bankers had to have sureties in place that could be as high as 2,000 marks of silver, which in today’s currency would be in the millions of dollars. Still, bankers still went bankrupt, and as Usher notes, “capital punishment was, however, inflicted in some cases. In 1360, Francesc Castello was beheaded in front of his bank.”
This piece of information might have remained relatively obscure if it was not also included by Edwin S. Hunt and James M. Murray in their book A History of Business in Medieval Europe, 1200-1500. In their section on banking, they note how various laws were in place that required bankers to keep large amounts of money in reserve and be able to pay back all their depositors. They give an example of how “daunting” these protections could be:
In Barcelona, for example, a law was passed in 1321 forcing failed bankers to be held for a year on bread and water until all accounts were satisfied; failing that, the consequences were extreme. In 1360, one such unfortunate, Francesc Castello, was beheaded in front of his bank.
Hunt and Murray’s book, first published in 1999, proved to be very successful and is still widely read. Their reference to Francesc Castello apparently caught the eye of Dan Church of Bethlehem, Pennsylvania, for he included these details in a 2012 letter to The Economist. The magazine published the letter, and with its million-plus readers in print and online, the story became much more widely known. Soon after, it was appearing on social media.
In 1360 a banker was beheaded in Barcelona in front of his bank for failing to honour his clients' accounts. #justsaying
— Katharine Ainger (@katainger) June 19, 2012
The reason for the popularity of this anecdote is that people think it makes a good comparison to how the banking system is treated (leniently) by authorities today. Just a few days ago, a financial newspaper included an article about this event, wryly noting “No $400 billion-TARP bailout programme for poor old Francesch.” While this author and others don’t suggest beheading as a punishment, there is a feeling that the banking sector and money managers are too easily escaping accountability for bad practices or even fraud.
While the story of Francesc Castello has been in the public eye for the last decade, there has also been some more research into his case by scholars. Flocel Sabaté mentions the episode as part of his book The Death Penalty in Late-Medieval Catalonia. He translates the entry regarding Castello’s execution as follows:
On 10th November 1360, Francesc Castelló, bankrupt banker, was decapitated in front of his house in the Square of Exchanges of the Sea.
While the previous two books say that Castello was executed in front of his bank, they are not wrong, as this place would have been Castello’s place of business as well as his home.
Another piece of information about Castello turns up in an article by Albert Reixach Sala and Esther Tello Hernández in which they try to identify all the bankers who were operating in Catalonia between 1280 and 1400. They found dozens of men who practiced this profession in Barcelona, including Castello, who was doing money-changing from at least 1332.
We can also speculate why Francesc Castello was executed. The year before his beheading several banks failed in Barcelona, perhaps caused by a war that was taking place between the Crown of Aragon and Castile (the city of Barcelona even witnessed a naval battle fought just off its shore that June). That same year, the local authorities issued new regulations on how they could apprehend bankrupt bankers who had fled the city and were being protected by other people in Catalonia.
It seems that Francesc Castello was one of the people who went bankrupt in 1259, but there must have been aggravating factors for his situation. Perhaps being a person in the business for over 28 years made him especially blameworthy for the failure, or perhaps he fled Barcelona and was later caught, or it might be just a case where he ran out of time to repay his investors.
There are two more details to note – first is that the social media posts about Francesc Castello often include a manuscript image of someone being beheaded. This actually has nothing with the banker, and as one Twitter user has pointed out, it is a scene where a peasant was being executed by royal authorities for his participation in the Jacquerie, a revolt in France against the nobility.
Finally, if you want to explore this story further, there is a novel about it – El fin de los secretos, by Miquel Esteve, was published in 2015.