Saturday Morning Muse: The Crusades, the Knights Templar, and Modern Banking

Episode Release Date: July 12, 2025
Host: Dr. Andrew Temte, CFA

Introduction

In the July 12, 2025 episode of Saturday Morning Muse, host Dr. Andrew Temte delves into the intriguing connections between the medieval Crusades, the Knights Templar, and the foundations of modern banking. With his extensive background in finance and history, Dr. Temte offers listeners a comprehensive exploration of how historical events have shaped contemporary financial systems.

Historical Context: The First Crusade

Dr. Temte begins by setting the stage in 1095, a pivotal year when Pope Urban II initiated the First Crusade. At [00:00], he explains:

“In 1095, Pope Urban II held two ecclesiastical or religious councils...”

Urban II sought to bolster the influence of the Roman Catholic Church and address the pleas of Byzantine Emperor Alexios I for military assistance against the Seljuk Turks. The Turks’ control over Jerusalem and other holy sites made pilgrimage perilous, prompting Urban II to rally European nobles with a compelling promise:

“[...] the forgiveness of sins and a fast pass into heaven for anyone who would participate in this holy war...” ([02:30])

This rallying cry galvanized both nobles and peasants, leading to the First Crusade (1096-1099), a series of military campaigns aimed at reclaiming the Holy Land and supporting Christian communities under threat.

Emergence of the Knights Templar

As the Crusades progressed, the logistical challenges of storing and securing wealth during prolonged campaigns became apparent. Dr. Temte highlights:

“Between 1096 and 1270, there were a total of eight major crusades to the Holy Land...” ([04:15])

To address this, the Knights Templar were established around 1118-1119 as a dedicated military order tasked with protecting Christian pilgrims. Members of this order pledged their assets to the organization, ensuring that their wealth was securely managed while they fought overseas.

The Knights Templar and Early Banking

Transitioning from military roles to financial innovators, the Knights Templar began issuing letters of credit around 1150. Dr. Temte elaborates:

“Knights in this order had to be single, in good health, and could hold no property or have any debts... they pledged all their assets to the order.” ([06:00])

These letters of credit functioned similarly to modern banking practices. Nobles could deposit their valuables with a Templar branch and receive a letter that allowed them to access these funds at other Templar locations across Europe and the Holy Land. This system provided security and flexibility for those embarking on extended military campaigns.

Moreover, the Knights Templar amassed significant wealth through donations, trade, and international commerce. They ingeniously navigated medieval usury laws, which prohibited charging interest on loans—a practice deemed immoral by the Catholic Church and other religious bodies. Instead of traditional interest, the Templars charged a form of rent, thereby circumventing these restrictions and establishing early banking fees.

“Usury...was considered immoral and was forbidden by the Catholic Church...so the Templars had to get creative with how to make money from providing banking services...” ([09:45])

Lessons for Modern Banking

Dr. Temte draws several key lessons from this historical narrative:

1. Origins of Modern Banking: Modern banking practices can trace their roots back to the Crusades and the innovative financial solutions developed by the Knights Templar.

   “Pope Urban II's sermon...proved to be a catalyst for significant innovation in global trade, commerce, and banking.” ([10:15])

2. History of Usury: Understanding the historical context of usury highlights the evolution of financial ethics and regulations. While interest is a staple of modern banking, its acceptance and regulation have deep historical roots.

   “The act of charging interest on a loan is really a relatively modern concept...” ([11:00])

3. Usury Laws Today: Contemporary usury laws aim to protect consumers by setting maximum interest rates, though loopholes and exemptions often limit their effectiveness. For instance, credit card interest rates as of July 2025 average 21.37%, a figure Dr. Temte suggests may be considered usurious by modern standards.

   “The average rate...is something a rational person would likely consider that rate usurious.” ([11:45])

Conclusion

Dr. Andrew Temte wraps up the episode by emphasizing the enduring impact of historical events on today's financial systems. He teases future discussions on interest rates, rates of return, and the relative risks of loans, promising listeners deeper insights into financial literacy.

“If you're a student of history, you know that many of the innovations that we enjoy...were born out of conflict and strife.” ([10:20])

For those intrigued by the connections between history and finance, this episode of Saturday Morning Muse offers a compelling narrative that underscores the profound ways in which our past shapes present-day financial practices.

To explore more episodes and deepen your financial literacy journey, visit www.andrewtemte.com.