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Banking and Eurodollars in Italy in the 1950s

Published online by Cambridge University Press:  23 March 2022

Ioan Achim Balaban
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Abstract

This article challenges current interpretations of the rise of the Eurodollar market. It argues that rather than being the exclusive innovation of British banks, the Eurodollar market had also Italian origins. Foreign-currency lending in Italy in the 1950s was characterized by competitive behavior. I explain the accumulation of Eurodollar deposits by Italian banks as resulting from the fact that nonresident foreign-currency deposits were not subject to reserve requirements. Furthermore, I discuss the attitudes of the Bank of Italy regarding the financing of foreign-currency credits with nonresident dollar deposits (Eurodollars) and compare the Eurocurrency liabilities of Italian banks vis-à-vis those of the City of London. The comparison facilitates an approximate estimation of the size of the Eurocurrency market in the late 1950s and, even more importantly, a recalibration of the view that the City of London was the dominant Eurodollar player from the outset.

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Article
Information
Enterprise & Society , Volume 24 , Issue 3 , September 2023 , pp. 759 - 783
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved.

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References

Bibliography of Works Cited

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Cotula, Franco, ed. Stabilità e Sviluppo negli anni Cinquanta, 3. Politica Bancaria e Struttura del Sistema. Rome-Bari: Laterza, 1999.Google Scholar
De Cecco, Marcello, and Ostuni, Maria Rosaria, eds. La BNL: Una Banca a Dimensione Internazionale, 1946–1960. Florence: Giunti, 2002.Google Scholar
Dufey, Gunter, and Giddy, H. Ian. The International Money Market. Englewood Cliffs, NJ: Prentice-Hall, 1978.Google Scholar
Eichengreen, Barry. Globalizing Capital: A History of the International Monetary System. Princeton, NJ: Princeton University Press, 1996.Google Scholar
Einzig, Paul, and Quinn, B. Scott. The Euro-Dollar System, Practice and Theory of International Interest Rates. London: Macmillan, 1977.Google Scholar
Gigliobianco, Alfredo. Via Nazionale: Banca d’Italia e classe dirigente. Rome: Donzelli, 2006.Google Scholar
Green, Jeremy. The Political Economy of the Special Relationship, Anglo-American Development from the Gold Standard to the Financial Crisis. Princeton, NJ: Princeton University Press, 2020.Google Scholar
Helleiner, Eric. States and the Reemergence of Global Finance: From Bretton Woods to the 1990s. Ithaca, NY: Cornell University Press, 1996.Google Scholar
Johnston, B. Robert. The Economics of the Euro-Market: History, Theory and Policy. London: Palgrave Macmillan, 1982.Google Scholar
Mendelsohn, Stefan. Money on the Move: The Modern International Capital Market. New York: McGraw-Hill, 1980.Google Scholar
Milward, S. Alan. The Reconstruction of Western Europe, 1945–1951. London: Methuen, 1987.Google Scholar
Milward, S. Alan, with the assistance of Brennan, George and Romero, Federico. The European Rescue of the Nation-State. London: Routledge, 1994.Google Scholar
Moran, Michael. The Politics of the Financial Services Revolution: The USA, UK, and Japan. Basingstoke, UK: Macmillan, 1991.CrossRefGoogle Scholar
Petri, Rolf. Storia economica d’Italia. Dalla grande guerra al miracolo economico. Bologna: Il Mulino, 2002.Google Scholar
Roberts, Richard. Take Your Partners: Orion, The Consortium Banks and the Transformation of the Euromarkets. Basingstoke, 2001.CrossRefGoogle Scholar
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Schenk, Catherine. The Decline of Sterling: Managing the Retreat of an International Currency, 1945–1992. Cambridge: Cambridge University Press, 2010.CrossRefGoogle Scholar
Toniolo, Gianni, with the assistance of Piet Clement. Central Bank Cooperation at the Bank for International Settlements, 1930–1973. New York: Cambridge University Press, 2005.Google Scholar
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Balaban, Ioan Achim. “International and Multinational Banking Under Bretton Woods: The Experience of Italian Banks (1945–1971).” PhD thesis, European University Institute, Fiesole, 2021.Google Scholar
Battilossi, Stefano. “Introduction: Historical Perspective.” In European Banks and the American Challenge, Competition and Cooperation in International Banking Under Bretton Woods, edited by Cassis, Youssef and Battilossi, Stefano, 1–36. Oxford: Oxford University Press, 2002.Google Scholar
Battilossi, Stefano. “The Eurodollar Revolution in Financial Revolution Technology. Deregulation, Innovation and Structural Change in Western Banking in the 1960s–70s.” IFCS–Working Papers in Economic History, 2009.Google Scholar
Battilossi, Stefano. “International Money Markets: Eurocurrencies.” In Handbook of the History of Money and Currency, edited by Battilosi, Stefano, Cassis, Youssef, and Yago, Kazuhiko, 269–315. Singapore: Springer Nature Singapore, 2020.CrossRefGoogle Scholar
Burn, Gary. “The State, the City and the Euro-Markets.” Review of International Political Economy 6, no. 2 (Summer 1999): 225–261.CrossRefGoogle Scholar
Conte, Leandro, and Piluso, Giandomenico. “Il finanziamento dell’IRI e i industr con il industr bancario (1948–1972).” In Storia dell’IRI. Vol.2, Il “miracolo” economico e il ruolo dell’IRI, 1948–1972, edited by Amatori, Franco, 463–522. Rome-Bari: Laterza, 2013.Google Scholar
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Fauri, Francesca. “Struttura e Orientamento Del Commercio Estero Italiano Negli Anni Cinquanta: Alle Origini Del ‘Boom’ Economico.” Studi Storici: Rivista Trimestrale Dell’Istituto Gramsci 37, no. 1 (1996): 191–225.Google Scholar
Gelsomino, Cosma O. “Moneta e sviluppo nel dopoguerra. La politica monetaria italiana negli anni Cinquanta (1946–1964).” In Stabilità e sviluppo negli anni Cinquanta, 2. Problemi strutturali e politiche economiche, edited by Cotula, Franco, 259–397. Rome-Bari: Laterza, 1998.Google Scholar
Gigliobianco, Alfredo, Piluso, Giandomenico, and Toniolo, Gianni. “Il rapporto banca-impresa.” In Stabilità e Sviluppo negli anni Cinquanta, 3. Politica Bancaria e Struttura del Sistema, edited by Cotula, Franco, 171–219. Rome-Bari: Laterza, 1999.Google Scholar
Reubling, Charlotte E. “The Administration of Regulation Q.” St. Louis, MO: Federal Reserve Bank of St. Louis, February 1970.Google Scholar
Rossi, Nicola, and Toniolo, Gianni. “Italy.” In Economic Growth in Europe Since 1945, edited by Crafts, Nicholas and Toniolo, Gianni, 427–454. Cambridge: Cambridge University Press, 1996.CrossRefGoogle Scholar
Saadma, Torsten, and Vaubel, Roland. “The Emergence and Innovations of the Eurodollar Money and Bond Market.” In Explaining Monetary and Financial Innovation, A historical Analysis, edited by Bernholz, Peter and Vaubel, Roland, 323–366. Cham, Switzerland: Springer International, 2014.CrossRefGoogle Scholar
Schenk, Catherine. “The Origins of the Eurodollar Market in London: 1955–1963.” Explorations in Economic History, no. 35 (1998): 221–238.CrossRefGoogle Scholar
Steib, B. Steve. “The Euro-Dollar Market as a Source of United States Bank Liquidity.” PhD thesis, Iowa State University, Ames, IA, 1972. Digital Repository @ Iowa State University, http://lib.dr.iastate.edu.Google Scholar
Sylla, Richard. “United States Banks and Europe: Strategies and Attitudes.” In European Banks and the American Challenge, Competition and Cooperation in International Banking Under Bretton Woods, edited by Cassis, Youssef and Battilossi, Stefano, 53–74. Oxford: Oxford University Press, 2002.Google Scholar
Banca Commerciale Italiana, Archivio Storico Intesa Sanpaolo, Milan, Italy (AS BCI).Google Scholar
d’Italia, Banca, Relazioni Annuale, Archivi Storici della Banca d’Italia, Rome, Italy, https://www.bancaditalia.it/pubblicazioni/relazione-annuale (ASBI).Google Scholar
Bank of International Settlements, Thirty-Fourth Annual Report, 1964, https://www.bis.org/publ/arpdf/archive/ar1964_en.pdf.Google Scholar
de France, Banque, Historical Archives of the Banque de France, Paris, France (BFA).Google Scholar
Bell, Geoffrey. The Euro-Dollar Market and the International Financial System. London: Macmillan, 1973.Google Scholar
Burn, Gary. The Re-emergence of Global Finance. New York: Palgrave, 2006.CrossRefGoogle Scholar
Carli, Guido, interviewed by Scalfari, Eugenip. Intervista Sul Capitalismo Italiano. Turin: Bollati Boringhieri, 2008.Google Scholar
Cassis, Youssef. Capital of Capitals: A History of International Financial Centres, 1780–2005. Cambridge: Cambridge University Press, 2006.CrossRefGoogle Scholar
Clendenning, E. Wayne. The Euro-Dollar Market. Oxford: Clarendon Press, 1970.Google Scholar
Cotula, Franco, ed. Stabilità e Sviluppo negli anni Cinquanta, 3. Politica Bancaria e Struttura del Sistema. Rome-Bari: Laterza, 1999.Google Scholar
De Cecco, Marcello, and Ostuni, Maria Rosaria, eds. La BNL: Una Banca a Dimensione Internazionale, 1946–1960. Florence: Giunti, 2002.Google Scholar
Dufey, Gunter, and Giddy, H. Ian. The International Money Market. Englewood Cliffs, NJ: Prentice-Hall, 1978.Google Scholar
Eichengreen, Barry. Globalizing Capital: A History of the International Monetary System. Princeton, NJ: Princeton University Press, 1996.Google Scholar
Einzig, Paul, and Quinn, B. Scott. The Euro-Dollar System, Practice and Theory of International Interest Rates. London: Macmillan, 1977.Google Scholar
Gigliobianco, Alfredo. Via Nazionale: Banca d’Italia e classe dirigente. Rome: Donzelli, 2006.Google Scholar
Green, Jeremy. The Political Economy of the Special Relationship, Anglo-American Development from the Gold Standard to the Financial Crisis. Princeton, NJ: Princeton University Press, 2020.Google Scholar
Helleiner, Eric. States and the Reemergence of Global Finance: From Bretton Woods to the 1990s. Ithaca, NY: Cornell University Press, 1996.Google Scholar
Johnston, B. Robert. The Economics of the Euro-Market: History, Theory and Policy. London: Palgrave Macmillan, 1982.Google Scholar
Mendelsohn, Stefan. Money on the Move: The Modern International Capital Market. New York: McGraw-Hill, 1980.Google Scholar
Milward, S. Alan. The Reconstruction of Western Europe, 1945–1951. London: Methuen, 1987.Google Scholar
Milward, S. Alan, with the assistance of Brennan, George and Romero, Federico. The European Rescue of the Nation-State. London: Routledge, 1994.Google Scholar
Moran, Michael. The Politics of the Financial Services Revolution: The USA, UK, and Japan. Basingstoke, UK: Macmillan, 1991.CrossRefGoogle Scholar
Petri, Rolf. Storia economica d’Italia. Dalla grande guerra al miracolo economico. Bologna: Il Mulino, 2002.Google Scholar
Roberts, Richard. Take Your Partners: Orion, The Consortium Banks and the Transformation of the Euromarkets. Basingstoke, 2001.CrossRefGoogle Scholar
Savona, Paolo, and Sutija, George, eds. Eurodollars and International Banking. Basingstoke, UK: Macmillan in association with International Banking Center, Florida International University, 1985.CrossRefGoogle Scholar
Schenk, Catherine. The Decline of Sterling: Managing the Retreat of an International Currency, 1945–1992. Cambridge: Cambridge University Press, 2010.CrossRefGoogle Scholar
Toniolo, Gianni, with the assistance of Piet Clement. Central Bank Cooperation at the Bank for International Settlements, 1930–1973. New York: Cambridge University Press, 2005.Google Scholar
Van Dormael, Armand. The Power of Money. London: Palgrave Macmillan, 1997.CrossRefGoogle Scholar
Albareto, Giorgio. “Concorrenza e politica bancaria.” In Stabilità e Sviluppo negli anni Cinquanta, 3. Politica Bancaria e Struttura del Sistema, edited by Cotula, Franco, 171–219. Rome-Bari: Laterza, 1999.Google Scholar
Albareto, Giorgio, and Trapanese, Maurizio. “La politica bancaria negli anni Cinquanta.” In Stabilità e Sviluppo negli anni Cinquanta, 3. Politica Bancaria e Struttura del Sistema Finanziario, edited by Cotula, Franco, 3–167. Rome-Bari: Laterza, 1999.Google Scholar
Altman, Oscar L. “Foreign Markets for Dollars, Sterling, and Other Currencies.” Staff Papers 8, no. 3 (1961): 313–352.CrossRefGoogle Scholar
Amatori, Franco. “The Tormented Rise of Organizational Capabilities Between Government and Families.” In Big Business and the Wealth of Nations, edited by Chandler, Alfred D., Amatori, Franco, and Hikino, Takeshi, 246–277. Cambridge: Cambridge University Press, 1999.Google Scholar
Baker, Mae, and Collins, Michael. “London as an International Banking Centre, 1958–1980.” In London and Paris as International Financial Centres in the Twentieth Century, edited by Cassis, Youssef and Bussière, Éric, 265–287. Oxford: Oxford University Press, 2005.Google Scholar
Balaban, Ioan Achim. “International and Multinational Banking Under Bretton Woods: The Experience of Italian Banks (1945–1971).” PhD thesis, European University Institute, Fiesole, 2021.Google Scholar
Battilossi, Stefano. “Introduction: Historical Perspective.” In European Banks and the American Challenge, Competition and Cooperation in International Banking Under Bretton Woods, edited by Cassis, Youssef and Battilossi, Stefano, 1–36. Oxford: Oxford University Press, 2002.Google Scholar
Battilossi, Stefano. “The Eurodollar Revolution in Financial Revolution Technology. Deregulation, Innovation and Structural Change in Western Banking in the 1960s–70s.” IFCS–Working Papers in Economic History, 2009.Google Scholar
Battilossi, Stefano. “International Money Markets: Eurocurrencies.” In Handbook of the History of Money and Currency, edited by Battilosi, Stefano, Cassis, Youssef, and Yago, Kazuhiko, 269–315. Singapore: Springer Nature Singapore, 2020.CrossRefGoogle Scholar
Burn, Gary. “The State, the City and the Euro-Markets.” Review of International Political Economy 6, no. 2 (Summer 1999): 225–261.CrossRefGoogle Scholar
Conte, Leandro, and Piluso, Giandomenico. “Il finanziamento dell’IRI e i industr con il industr bancario (1948–1972).” In Storia dell’IRI. Vol.2, Il “miracolo” economico e il ruolo dell’IRI, 1948–1972, edited by Amatori, Franco, 463–522. Rome-Bari: Laterza, 2013.Google Scholar
Conti, Giuseppe. “Le banche e il finanziamento industriale.” In L’industria. Vol. 15, d’Italia, Storia, edited by Amatori, Franco, Bigazzi, Duccio, Giannetti, Renato, and Segreto, Luciano, 444–504. Turin: Einaudi, 1999.Google Scholar
Fauri, Francesca. “Struttura e Orientamento Del Commercio Estero Italiano Negli Anni Cinquanta: Alle Origini Del ‘Boom’ Economico.” Studi Storici: Rivista Trimestrale Dell’Istituto Gramsci 37, no. 1 (1996): 191–225.Google Scholar
Gelsomino, Cosma O. “Moneta e sviluppo nel dopoguerra. La politica monetaria italiana negli anni Cinquanta (1946–1964).” In Stabilità e sviluppo negli anni Cinquanta, 2. Problemi strutturali e politiche economiche, edited by Cotula, Franco, 259–397. Rome-Bari: Laterza, 1998.Google Scholar
Gigliobianco, Alfredo, Piluso, Giandomenico, and Toniolo, Gianni. “Il rapporto banca-impresa.” In Stabilità e Sviluppo negli anni Cinquanta, 3. Politica Bancaria e Struttura del Sistema, edited by Cotula, Franco, 171–219. Rome-Bari: Laterza, 1999.Google Scholar
Reubling, Charlotte E. “The Administration of Regulation Q.” St. Louis, MO: Federal Reserve Bank of St. Louis, February 1970.Google Scholar
Rossi, Nicola, and Toniolo, Gianni. “Italy.” In Economic Growth in Europe Since 1945, edited by Crafts, Nicholas and Toniolo, Gianni, 427–454. Cambridge: Cambridge University Press, 1996.CrossRefGoogle Scholar
Saadma, Torsten, and Vaubel, Roland. “The Emergence and Innovations of the Eurodollar Money and Bond Market.” In Explaining Monetary and Financial Innovation, A historical Analysis, edited by Bernholz, Peter and Vaubel, Roland, 323–366. Cham, Switzerland: Springer International, 2014.CrossRefGoogle Scholar
Schenk, Catherine. “The Origins of the Eurodollar Market in London: 1955–1963.” Explorations in Economic History, no. 35 (1998): 221–238.CrossRefGoogle Scholar
Steib, B. Steve. “The Euro-Dollar Market as a Source of United States Bank Liquidity.” PhD thesis, Iowa State University, Ames, IA, 1972. Digital Repository @ Iowa State University, http://lib.dr.iastate.edu.Google Scholar
Sylla, Richard. “United States Banks and Europe: Strategies and Attitudes.” In European Banks and the American Challenge, Competition and Cooperation in International Banking Under Bretton Woods, edited by Cassis, Youssef and Battilossi, Stefano, 53–74. Oxford: Oxford University Press, 2002.Google Scholar
Banca Commerciale Italiana, Archivio Storico Intesa Sanpaolo, Milan, Italy (AS BCI).Google Scholar
d’Italia, Banca, Relazioni Annuale, Archivi Storici della Banca d’Italia, Rome, Italy, https://www.bancaditalia.it/pubblicazioni/relazione-annuale (ASBI).Google Scholar
Bank of International Settlements, Thirty-Fourth Annual Report, 1964, https://www.bis.org/publ/arpdf/archive/ar1964_en.pdf.Google Scholar
de France, Banque, Historical Archives of the Banque de France, Paris, France (BFA).Google Scholar