Opera Omnia Luigi Einaudi

The Assault on Banks and a Banking Week

Tipologia: Paragrafo/Articolo – Data pubblicazione: 07/08/1920

The Assault on Banks and a Banking Week

«The Economist», 7 agosto 1920, pp. 227-228




Turin, July 31



This week may be called the banking week. Parliament has been busy with banking discussions, and newspapers were overflowing with banking articles. Ninetenths of speeches and articles were mere rubbish, as may be easily expected from the technicalities of the matter and the widespread incompetence of speakers and leader-writers. The gist of the problem is this: the Italian banking evolution has been somewhat different from English and German ones; we have not banks of the pure classical species as you have in England, but also the banks of the German type are by no means exclusively dominant. At June 30, 1919, the sum total of deposits (saving and current account deposits) was 17,435 million lire, which were thus distributed among the various types of banking institutions:



Issue banks (Bank of Italy, of Naples, and of Sicily)

Ordinary banks (in the English sense)

Popular banks

Other co-operative banks

Savings banks

Postal savings banks

Banks annexed to pawn-offices (Monti di Pieta)

Rural banks












As you see, the distribution of deposits is very various and wholesome. The ordinary banks, of which the foremost are the Banca Commerciale, the Credito Italiano, the Banca Italiana di Sconto, and the Banco di Roma, do not absorb more than a fifth of the Italian deposits. The other four-fifths are distributed between cooperative banks (popular and others), which cater for the medium-sized and little traders, enterprisers and agriculturists, rural banks which have their customers in the world of little farmers, savings banks (among whom may be counted powerful institutions with deposits amounting to hundreds of millions), which are public local institutions and make loans to public bodies and discount commercial paper of very high standing, and give loans on collaterals. There are finally the postal savings banks, which are opened by the State in every town – one may say in every hamlet – in Italy, and whose deposits are managed by the biggest Italian banking institution, very little known to the public, the Cassa di Depositi e Prestiti. The Cassa is a State bank, which is a sort of trustee of saving banks deposits and of the funds of other public institutions, and makes loans to provinces, municipalities, and public bodies, besides investing large sums in State Rentes and Exchequer bills.


The banking world in Italy is thus varied, and one may have very little fear that a good customer, whether private or public, may find himself cramped by a refusal of credit in consequence of a combination of banks. The cooperative and public banks are so predominant that even if the four big ordinary banks were united in a banking trust, credit could not be wanting to honest, independent men. The peculiar distribution of deposits has had another consequence: that the ordinary banks, and especially the big four, whose names I have above quoted, have had a keen competition to face in the discount of good mercantile papers and in loans for collaterals. The more so as in Italy lives, and vigorously lives, a number of private banks, which do not publish their accounts, and which have a well-tried clientèle. Especially in Turin, the private banks have a well-earned and time-honoured standing. The big four were, almost by force, insensibly coerced to seek means for employing the funds they had at hand in operations different from the classical discount of commercial paper and loans on collaterals. They ventured on buying shares and debentures of joint-stock companies; they made loans for a long series of years to industrial and commercial companies and firms, giving thus fixed, and not only circulating, capital; they were underwriters to public and private issues. As in Germany, though not to the same extent, industry became intermixed with banking; and on the board of numerous industrial companies were sitting banking men. At the head of the big four are some of the very ablest business men of Italy; and they soon exercised an effective control over some of the biggest industrial Italian companies. This was an evolution which may have seemed natural, and would hardly have been noticed if it were not for a counter-evolution which set in during the war. The banks controlled some industries; and the industrial leading men began to desire to control banks. Signori Perrone, the heads of a great engineering firm, after having acquired a preponderating interest in the Banca Italiana di Sconto, desired to interest themselves in the Banca Commerciale Italiana, and in a short time bought 200,000 shares out of a total of 520,000 shares issued. This event made other great captains of industry fear that, little by little, Signori Perrone may extend their control from the Banca Italiana di Sconto to other ordinary banks, and so monopolise the greatest part of the three billions and upward of deposits. A counter-move was made by Signor Agnelli, head of the Fiat, the well-known motorcar company, and by Signor Gualino, which sought to acquire control of Credito Italiano. The menaced boards of the two banks, Commerciale and Credito, took alarm, and after a long race in acquiring a majority of shares, they endeavoured by issue of new shares to assure to themselves and to their friends the independence from too big customers desiring to acquire control of the banks. At last a compromise was effected. Signori Perrone sold their shares, and two trusts were created, which are holding the majority of the shares of the two banks. The trustees are friends of the boards of the banks, and it is hoped that they will exercise their right of vote in the interest of the independence of the banks from their customers. This compromise was arrived at in March last, Premier Nitti and Minister of Industry Ferraris aiding to reach the result, which, to sum up, must be deemed useful to the wholesomeness and independence of the banking functions.



This almost forgotten story was revived with un unheard of violence of language and of political passion in the past and present week. The Socialist papers took up the matter of the assault on banks as a means of discrediting all bourgeois institutions. Partisans of the present Premier, Signor Giolitti, see in the topic an excellent weapon for discrediting ex-Premier Nitti. Accusations of all sorts were made of bribery, corruption, German intrusions, hundreds of millions lire extorted during the various buying processes and issues of shares to little shareholders, &c. Amid a great confusion of words and looseness of ideas, the Chamber of Deputies voted the principle of an exhaustive inquiry into bank management and banking shares manipulations. We shall see if some good will come out of this so-called scandal.

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