A lesson from Vivaldi

Francesco Vivaldi gave us the concept of compound interest to free Genoa from its fiscal troubles - and it worked, says Merryn Somerset Webb. The Bank of England should take note.

In 1371, something interesting happened in Genoa. Francesco Vivaldi invented, or at least formalised, the concept of compound interest. It didn't come in quite the form that it does today. Vivaldi held large amounts of the debt issued by the municipality of Genoa.

In an attempt to help the city out of fiscal difficulties, he placed the debt in a sinking fund and demanded that the interest received every year be used to buy further debt until the fund owned the entire tranche of debt. It would then be cancelled. By 1454, the fund had bought 99.8% of the compera' in question (debt tranches were referred to as comperas this was the Compera Pacis), or around 12% of the public debt at the time.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.