From Wikipedia

Secret Files Of The Inquisition
Episode Two

Tears Of Spain

An inquisition was created through papal bull, Ad Abolendam, issued at the end of the 12th century by Pope Lucius III as a way to combat the Albigensian heresy in southern France. There were a huge number of tribunals of the Papal Inquisition in various European kingdoms during the Middle Ages. In the Kingdom of Aragon, a tribunal of the Papal Inquisition was established by the statute of Excommunicamus of Pope Gregory IX, in 1232, during the era of the Albigensian heresy. Its principal representative was Raimundo de Peñafort. With time, its importance was diluted, and, by the middle of the 15th century, it was almost forgotten although still there according to the law.

There was never a tribunal of the Papal Inquisition in Castile. Members of the episcopate were charged with surveillance of the faithful and punishment of transgressors. During the Middle Ages, in Castile, little attention was paid to heresy by the Catholic ruling class. Jews and Muslims were tolerated and generally allowed to follow their traditional laws and customs in domestic matters. However, by law, they were considered inferior to Catholics and were subject to discriminatory legislation.

The Spanish Inquisition can be seen as an answer to the multi-religious nature of Spanish society following the reconquest of the Iberian Peninsula from the Moors (Muslims). For over 500 years, much of the Iberian Peninsula was dominated by the Moors following their invasion of the peninsula in 711 until the early thirteenth century. Following the Christian victory at the Battle of Las Navas de Tolosa (1212), and the fall of Cordoba (1236) and Seville (1248) most of peninsula came under Christian rule. Only the small region of Granada remained under Muslim rule which ended with a final Christian victory in 1492. However, in the medieval period the Reconquista did not result in the expulsion of Muslims from Spain, since they, along with Jews, were tolerated (although treated as inferiors) by the ruling Catholic elite. Large cities, especially Seville, Valladolid and Barcelona, had significant Jewish populations centered in "Judería".

Post-reconquest medieval Spain has been characterized by Americo Castro and some other Iberianists as a society of "convivencia," that is relatively peaceful co-existence, albeit punctuated by occasional conflict among the ruling Catholics and the subject Jews and Muslims. However, as Henry Kamen notes, "so-called convivencia was always a relationship between unequals." Despite their legal inequality, there was a long tradition of Jewish service to the crown of Aragon and Jews occupied many important posts, both religious and political. Castile itself had an unofficial rabbi.

Ferdinand's father John II named the Jewish Abiathar Crescas to be Court Astronomer. Nevertheless, in some parts of Spain towards the end of the 14th century, there was a wave of violent anti-Judaism, encouraged by the preaching of Ferrant Martinez, Archdeacon of Ecija. The pogroms of June 1391 were especially bloody: in Seville, hundreds of Jews were killed, and the synagogue was completely destroyed. The number of people killed was also high in other cities, such as Córdoba, Valencia and Barcelona.

One of the consequences of these pogroms was the mass conversion of Jews. Although the forcibly baptized could legally return to Judaism, after the hundreds of murders, many of the converted "felt it safer to remain in their new religion." Thus after 1391 a new social group appeared: conversos, also called New Christians. Many conversos, now freed from the antisemitic restrictions imposed on Jewish employment, attained important positions in 15th century Spain, including in the government and the Church. Among many others, physicians Andrés Laguna and Francisco Lopez Villalobos (Ferdinand's court physician), writers Juan del Enzina, Juan de Mena, Diego de Valera and Alonso de Palencia, and bankers Luis de Santangel and Gabriel Sanchez (who financed the voyage of Christopher Columbus) were all conversos. Conversos - not without opposition - managed to attain high positions in the ecclesiastical hierarchy, at times becoming severe detractors of Judaism. Some even received titles of nobility, and as a result, during the following century some works attempted to demonstrate that virtually all of the nobles of Spain were descended from Israelites.