Showing papers in "Financial History Review in 2005"

The structure of Italian capitalism, 1952-1972: new evidence using the interlocking directorates technique

Abstract: The paper explores the structure of Italian capitalistic system by focusing on the relationships between financial banks, insurances and holdings- and industrial firms in Italy during the period 1952-72 through the analysis of the interlocks that existed between them. By an interlock is meant the link created between two firms when an individual belongs to the board of directors of both. The analysis is based on a database -Imita.db- containing data on over 300,000 directors of Italian joint stock companies for the years 1952, 1960 and 1972. After showing a descriptive statistics of the firms and the directors included in the database, the paper develops a network connectivity analysis of the system. This is integrated by a prosopographic study about the big linkers, defined as those directors cumulating the highest number of offices in each benchmark year. The paper confirms that Italian capitalism maintained substantial peculiarities in the period investigated. In particular, it argues that interlocks played an important role in guaranteeing the stability of the positions of control of the major private firms and their connections with State owned firms. In 1952 and 1960, the system, centred on the larger electrical companies, showed the highest degree of cohesiveness. That centre dissolved after nationalisation of the electricity industry in 1962 and was replaced by a less strong and cohesive one, hinged on banks, insurances and the major finance companies.

Lotteries in the 1690s : investment or gamble?

Abstract: Original article can be found at : http://journals.cambridge.org/ Copyright Cambridge University Press

Complementary currencies: a prospect on money from a retrospect on premodern practices

Abstract: Debasement has generally been condemned as a defect of premodern money, that was eventually amended by the institution of the gold standard. Building on monetary history and thought from the sixteenth to the eighteenth century, this article argues that debasement was instead an instrument designed to maintain the metal standard where it was needed, in the circuit of long-distance trade, while preserving the possibility of an autonomous distribution within local economies. The theoretical distinction between monetary functions (measure and means of exchange) was made effective by the articulation of ideal and real money (via debasement and enhancement), providing complementary economic areas with complementary currencies. Moreover, the distinction between monetary functions also appears as a constituent feature of money from the perspective of a reappraisal of the milestones of monetary thought, from Smith to Keynes.

The Baring Crisis and the Brazilian Encilhamento, 1889–1891: An Early Example of Contagion Among Emerging Capital Markets

Abstract: This article assesses the role of international markets in the brazilian financial crisis of 1890/91 (the crash of the encilhamento). It looks for the impact of the argentine financial crisis in 1890 (the baring crisis) on brazilian access to capital markets. The history of bond yield fluctuations in london for brazilian and argentine debt, exchange rates, data on investment flows and archival and journalistic accounts reveal a close congruence between the argentine and brazilian crises. The effects of the argentine experience carried over to brazil because the open capital and money markets of the period easily transmitted crisis from one economy to another and because fundamental conditions in both economies rendered them similarly vulnerable to fluctuations in capital flows. The article raises this case as a precedent for the contagious financial crises that emerging markets faced at the end of the twentieth century.

Finance-led divergence in the regions of Italy

Abstract: The article evaluates finance-led growth as an explanation for regional divergence in Italy over the years 1890–1910. Regional banking disparities are documented and the hypothesis developed that the financial crisis of the early 1890s struck the fledgling Southern Italian banking system at a vulnerable moment, distorting its subsequent development and handicapping the region's economy. The South is revealed to have been a chronically (over the entire period) and comprehensively (on every indicator) unhealthy environment for banks. Further evidence indicates that regional divergence in bank assets was largely due to the South's failure to develop the entire range of large banks. Size-class transition matrix analysis reveals that the typical Southern bank failed to reach a large size because it was born smaller (and less frequently) than in the North, suffered a higher mortality rate, especially in the smaller classes, and had lower growth probabilities, especially in the larger categories. The salience of deposits on the liability side and government securities on the asset side suggests that they reflected more than directly caused the development of their local economies.

English Bank Business Loans, 1920–1968: Transaction Bank Characteristics and Small Firm Discrimination

Abstract: The article reports the results of primary research aimed at eliciting new information on the nature of the relationship between english banks and the business sector over the long period, 1920–68. Bank archives have been used to conduct a microeconomic study of lending by english commercial banks to business clients. Three sets of results are reported. First, on the basis of a sample of over four thousand individual business loans, new data are presented on the nature and duration of business loans, the purposes for which they were used, the banks' requirements regarding collateral and interest rates charged. Secondly, the parameters governing bank practice are examined through the presentation of the reasons for which one of the leading clearing banks, the midland, turned down requests for business loans from a subset of firms. Thirdly, a detailed comparison is made of the loans granted to small private firms and to larger public companies; and regression analysis is used to assess the banks' treatment of the two groups. The data are presented within the theoretical framework of english ‘transaction banking’ which, it is argued, offers a strong rationale for the reported continuity in bank practice over the long term.

The state, banks and financing of investments in France from World War II to the 1970s

Abstract: This article examines how corporate financing has been adjusted during the high growth period after World War II. First, it discusses how the Ministry of Finance tried on the one hand to liberalise the system after the 1950s, but on the other hand, did not want to undermine the ‘Treasury circuit’ that allowed its administration to control the economic situation. Secondly, during 1960s, the relationships between state and banking industry became so tight that they strengthened the banking cartel and increased the banking system's contribution to the financial system. The high costs of issuing capital in France contrast with the low interest rates during the period. The French choice of financial system for economic development clearly did not favour markets, but focused on deposit and investment banks, and settled on both a ‘state-based’ and ‘bank-based’ system.

The predecessors of ABN AMRO and the expropriation of Jewish Assets in the Netherlands

Abstract: This article describes the role played by Dutch banks in the confiscation of Jewish property during World War II. ABN AMRO's predecessors, then seven commercial banks, surrendered the lion's share of Jewish financial assets to the Nazis. How can this be explained? One possible answer is that the banks allowed their own, commercial, interests to prevail over those of their Jewish clients. Other factors were: strategies of deception by the German authorities, low level of resistance among Dutch Jews, German pressure on banks to release Jewish assets and, finally, the lengthy duration of the war. © European Association for Banking and Financial History e.V. 2005.