Autore
Brambilla, Carlo

Titolo
Fading Investment Banking? Italy Before the Second World War
Periodico
Università degli Studi dell'Insubria. Dipartimento di Economia. Quaderni di ricerca
Anno: 2011 - Fascicolo: 10 - Pagina iniziale: 1 - Pagina finale: 30

The banking crisis of the early 1930s put an end to investment banking in Italy and led to a radical reform that almost `nationalized' the banking system and entrusted state-owned special credit institutions with industrial financing and investments. The development of investment banking in Italy from its appearance in the 1860s to its collapse in the early 1930s was an evolutionary process of innovation through which big banks tried to root in a newly emerging financial system, tweaking to the developments of markets and institutions, as they gradually came forth, mainly in response to crises. In the first pioneering decades after the reunification of the country, big joint stock 'French-style' investment banks played a role in supporting investments in infrastructures and public utilities, eventually collapsing in the aftermath of the fierce financial crisis that hit a still fragile banking system at the end of the 1880s. During the international positive trend of the 1900s-1910s, the new universal banks that replaced them from the mid-1890s flanked and fostered the first wave of Italian industrialization, establishing a network of branches and growing larger and faster then their ancestors. Nonetheless, big joint stock banks still had to face up to an institutional framework that did not provide incentives for information disclosure by companies, did not limit the speculative attitudes and prices' volatility of the stock exchanges, thus allowing for high degrees of opacity as for the quality of investments and for overly high risks connected with capital investments. Moreover, persistent segmentation of the banking system and the presence of large shares of non-contestable deposit-taking financial intermediaries limited universal banks' external growth and curtailed their ability to collect resources. Big banks' responses to those issues tended to improve capital markets weaknesses and instability, and to expose the banks themselves to liquidity risks and financial crises. During the 1920s growing maturity mismatch risks and hazardous policies they adopted made universal banks transform into quasi-holding companies, an `innovation' in the pattern of investment banking that eventually led to its failure in the aftermath of the 1929 crash.



Testo completo: http://eco.uninsubria.it/dipeco/quaderni/files/QF2011_10.pdf

Esportazione dati in Refworks (solo per utenti abilitati)