CENTRALIZATION AT DIFFERENT SPEEDS: THE ITALIAN BANKING REFORMS OF 1926 AND THE MAKING OF A MODERN CENTRAL BANK

Luca Papi

No 511, Working Papers from Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali

Abstract: A century after the Italian banking reforms of 1926, this article reassesses them as a decisive but incomplete stage in the making of the Banca d'Italia as a modern central bank. Drawing on legislation, the Bank's annual reports, published correspondence, and archive-based scholarship, it distinguishes three processes that advanced at different speeds. Monetary centralization was immediate: the May 1926 decree ended the issuing rights of the Banco di Napoli and Banco di Sicilia more than four years before their scheduled expiry and gave the Banca d?Italia control of interbank clearing. Legal centralization converted long-standing functional dominance into monopoly through a "managed" process, negotiated in Naples and contested in Palermo. Informational centralization (registration, reporting, authorization, and inspection) was gradual and uneven, and the largest mixed banks escaped early on-site scrutiny. Issue unification also created the consolidated balance sheet on which the parity and reserve rule of December 1927 were imposed, without conferring monetary-policy autonomy. Two propositions are advanced as hypotheses for archival testing: that external financial negotiations precipitated the timing of unification, and that the Bank's own credit exposures shaped supervisory forbearance.

Keywords: Central banking; note issue; bank supervision; Banca d'Italia. (search for similar items in EconPapers)
JEL-codes: E58 N14 N24 (search for similar items in EconPapers)
Pages: 32
Date: 2026-10
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