From crusaders to bankers

The Middle Ages have provided the history enthusiasts with a story that can hardly be rivaled — the story of the Knights Templar. The Knights Templar was founded in the early twelfth century and throughout the crusades, they grew into a powerful and mysterious order of knights in Europe. Known for their bravery and obedience in the field of battle, they were not limited to warfare alone and extended into the realms of commerce, religion and diplomacy. In the way they managed money and in the banking systems that they developed, they provided the foundations of modern financial practices.

The origin of the Knights Templar is closely linked to the Crusades, which were a series of military campaigns that the Christians of Europe undertook, with the mission of recapturing the Holy Land from the Muslims. During these unstable years, several knights formed a brotherhood of fighters whose main role was to protect the pilgrims to Jerusalem. These new knights of the Templar soon gained reputation for their bravery and loyalty to their cause. Because of these challenges that the pilgrims faced, the Templars employed their wealth and power to aid in the movement of money and trade for the financial support of the crusade in Europe and the Middle East.

The history of the Knights Templar can be traced back to the early half of the twelfth century, following the sack of Jerusalem in 1099. The order was founded in 1119 by Hugues de Payens, a knight in the service of the French king and a group of fellow knights; they presented their services to Baldwin II, King of Jerusalem, and requested that he establish a monastic military order to guard pilgrims. Realising their strategic significance, Baldwin bestowed upon them headquarters in the Temple Mount. From this small beginning the Templars expanded in strength and number, receiving funds and recruits from the nobility and from common people all over Europe. Since they were entrusted with the role of protecting pilgrims as well as being the defenders of Christianity, they were able to attain immense military and religious authority, sanctioned by the church and the European nobility.

When they were created, their initial aim which was to protect Christian travellers evolved into the first financiers and banks. They also provided banking to fellow crusaders and travellers to protect their money and wealth and facilitate the transfer of capital. They assisted in the creation of safe long distance trade through use of letters of credit which played a crucial role in enhancing the economy and trade in mediaeval Europe. The Templars, being an organisation of knights that operated on the principles of philanthropy, had little to do with the loans which were provided; instead, they promoted cultural and economic interaction in the middle ages. They also had specific measures for handling cash and other measures of accounting which were the fundamentals of modern banking security.

The Order of the Knights Templar became extremely wealthy and powerful, as they were granted the responsibility of protecting the holy land. They achieved this by mutually partnering with monarchs and nobles. However, the growth of the Knights Templar was going to be sure to bring out the resistance of other religious orders and kings. Maneuverings and scandals, as well as claims of heresy, blasphemy and corruption only amplified the doubts and undermined them. In the early 14^th century, King Philip IV of France and Pope Clement V schemed against the Templars and the reasons were the king’s indebtedness to the order and political instability. A papal bull labeled the order as heretics, and consequently, the members were arrested, their property confiscated, and the order disbanded.

Nevertheless, they have introduced various changes in the field of banking and finance, for instance, investment management, secure deposit and letters of credit.

In conclusion, it can be stated that the Knights Templar are rather ambiguous when it comes to history, beginning with their role as a military and religious order and ending with the role of financial pioneers. These dynasties’ influence on banking and finance can be felt even today and as such, it is evident that they are still applicable to the contemporary world.

Published in The Express Tribune, June 8^th, 2024.

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