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                ABSTRACTS IN ECONOMIC HISTORY
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Name:  Elio Cerrito
Email:  elio.cerrito at bancaditalia.it
Institution:  Banca d'Italia

Co-author:  Bonelli, Franco (Università di Roma Tre)

Title: L'emergere di una funzione pubblica di 
controllo monetario. La Banca d'Italia dal 1894 
al 1913

Internet Address of abstracted work:  not available

By mail:
Elio Cerrito
Banca d'Italia - Ufficio Ricerche Storiche
via Nazionale 191
00184 Roma - Italy

Language:  Italian; a preliminary English version exists

Abstract:
The emergence of a public function of monetary 
control. The Bank of Italy from 1894 to 1913

The emergence of the Bank of Italy as the 
principal entity responsible for monetary control 
is the result of a radical institutional 
transition that must be analyzed holistically, 
prescinding from reductionistic illusions. The 
Treasury and an elite group from the 
public-sector led a strategic role in starting 
and directing this process. From the passing of 
the Banking Law of 1893 to the first world war, 
there was a succession of different models of 
monetary authority. A sudden break with the old 
conceptions and practices was brought about by 
the establishment of a system that gave 
preeminence to the Treasury; following this, 
there was a continually greater delegation of 
authority to the Bank of Italy and in the 
beginning of the 1900s, an ideal type of issuing 
institution characterized by its central position 
and close integration within the banking system 
emerged.

This process was connected to profound changes in 
the Bank of Italy's top management and decisional 
process, summarizable in the shunting of 
shareholders' interests and in the empowerment of 
a management that definitively lost its former 
characteristic as representative of the main 
banking and industrial groups and acquired 
features of the public-sector grand commis.

During these twenty years, the objectives of 
monetary control and financial stability that had 
to guide the Bank of Italy's actions 
progressively and clearly emerged. Far from 
strictly adhering to the canons of the time, 
monetary strategy and conduct were adapted to 
better respond to the reality of the country. The 
main results were 1) the adaptation of the 
preference function to a highly unstable 
environment on which the Bank had little 
influence, to the needs for economic development 
and to the problems left by the legacy of 
worthless assets produced by events of the 1880s 
and the crisis of 1893 and 2) the search for 
operative instruments and models of monetary 
conduct suitable to the scarce impact of changes 
in the discount rate on international capital 
flows, to segmentation of the market and to the 
minimal integration of issuing banks with the 
most modern and important segments of the banking 
system.


Bibliography: Franco Bonelli and Cerrito, Elio, 
L'emergere di una funzione pubblica di controllo 
monetario. La Banca d'Italia dal 1894 al 1913, in 
"Rivista di storia economica," Parte I, n. 3, 
1999, Parte II, n. 1, 2000

Subject:  H
Geographical Area:  4
Country/Region:  Italy
Time Period:  7

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