Banca d’Italia

   Created in 1893 in the wake of the Banca Romana financial scandal by the fusion of three substantial banks, the Banca d’Italia has played a crucial role in Italy’s economic and political development. Until 1926, the Bank had to share the emission of currency with two other banks, the Bank of Naples and the Bank of Sicily, but in that year its exclusive right both to issue banknotes and to act as regulator of the banking system was affirmed. Following a banking crisis brought on by the dire economic conditions of the early 1930s, in March 1936, the Bank’s legal autonomy was established and its regulatory powers were broadened. After World War II, the bank, putting into practice the constitutional protection of savings guaranteed by article 47 of the Constitution of 1948, conducted a rigorous anti-inflation policy that formed the basis of the economic miracle of the 1950s and 1960s. In the 1970s and 1980s, the Bank was freed from the obligation to buy surplus treasury bonds and gained considerable autonomy to set interest rates. The governor of the Bank of Italy is a major figure in Italian society, and several of them have combined banking with subsequent political careers. Luigi Einaudi was governor before he became president of the Republic in 1948; Carlo Azeglio Ciampi was governor from 1979 to 1993 and left only to become first premier, then treasury minister, and finally president. Tommaso Padoa-Schioppa, treasury minister in the government formed by Romano Prodi in 2006, is a former high official of the Bank of Italy; so were Lamberto Diniand Guido Carli.

   The governor of the Bank is a lifetime appointment and is thus theoretically free from political pressures. In 2005, this arrangement was shown to have its drawbacks when the then governor, Antonio Fazio, was accused of having improperly favored an Italian bank that was trying to ward off a takeover bid by a Dutch rival. Fazio clung to his post until the scandal forced him to resign. The Bank had previously been the only major Italian institution untouched by the malaise in public life and had enjoyed an international reputation for both technical competence and probity.

   See also Economy; European Integration.