cca ▁in ▁T usc any . ▁ ▁These ▁trade ▁links ▁were ▁based ▁on ▁lo ans , ▁similar ▁to ▁modern - day ▁Bank ▁lo ans ; ▁other ▁lo ans ▁were ▁linked ▁to ▁the ▁need ▁to ▁fin ance ▁the ▁Cr us ades ▁and ▁the ▁city - states ▁of ▁Italy ▁found ▁themselves ▁- ▁uniqu ely ▁- ▁at ▁the ▁intersection ▁of ▁international ▁trade , ▁fin ance ▁and ▁religion . ▁ ▁The ▁lo ans ▁of ▁the ▁time ▁were ▁however ▁not ▁yet ▁se cur it ized ▁in ▁the ▁form ▁of ▁b onds . ▁ ▁That ▁innov ation ▁came ▁from ▁further ▁north : ▁Ven ice . ▁ ▁In ▁ 1 2 th ▁Century ▁Ven ice , ▁the ▁city - state ' s ▁government ▁began ▁issu ing ▁war - b onds ▁known ▁as ▁prest iti , ▁perpet u ities ▁pay ing ▁a ▁fixed ▁rate ▁of ▁ 5 % ▁. ▁These ▁were ▁initially ▁regarded ▁with ▁susp icion ▁but ▁the ▁ability ▁to ▁buy ▁and ▁sell ▁them ▁became ▁regarded ▁as ▁valuable . ▁ ▁Sec ur ities ▁of ▁this ▁late ▁Med ieval ▁period ▁were ▁pr iced ▁with ▁techniques ▁very ▁similar ▁to ▁those ▁used ▁in ▁modern - day ▁Quant itative ▁fin ance . ▁The ▁bond ▁market ▁had ▁begun . ▁ ▁Following ▁the ▁H undred ▁Years ' ▁War , ▁monarch s ▁of ▁England ▁and ▁France ▁default ed ▁on ▁very ▁large ▁deb ts ▁to ▁Ven et ian ▁bank ers ▁causing ▁a ▁collapse ▁of ▁the ▁system ▁of ▁Lomb ard ▁bank ing ▁in ▁ 1 3 4 5 . ▁ ▁This ▁economic ▁set - back ▁hit ▁every ▁part ▁of ▁economic