The Regional Financial System: Institutional Varieties and Complementarity (1861-1914)

This chapter discusses the evolution of Lombardy’s financial structure as a regional component of the emerging national system and its region-specific trajectories, profoundly influenced by some pre-Unitarian features such as the absence of a bank of issue. The contribution highlights some evolutionary patterns: Lombardy took advantage of its international connections by attracting foreign capital; the major German-style universal banks established in Milan in the 1890s fostered the development of the stock market; thus, Milan became Italy’s main financial centre before WWI by harmonising all the components of the regional banking system, while small local banks, widely spread in the provinces, supported industrial districts and small manufacturing firms (also, and quite often, through insider lending practices). Milan achieved its primacy by combining the greatest financial institutions (namely, Banca Commerciale Italiana and Credito Italiano) with many private bankers in Milan, the largest Italian savings bank, and a number of small- or medium-sized banks operating in the provinces. This combination stresses the relevance of two main features of the evolutionary process of the regional financial system: as such, in the longer term, the system was characterised by institutional varieties and complementarity of its components.