The official site of Italy's central bank

From the 1950s to Maastricht

Reconstruction and development

For Italy the 1950s was a time of sustained economic development in a context of monetary stability. The choice of international opening, which introduced salutary competitive stimulus into the economy, was consolidated by membership in the European Economic Community (1957) and the introduction (1958) of convertibility of the lira into other currencies for non-residents (external convertibility).

The Bank, headed by Donato Menichella (who had succeeded Einaudi in 1948, when the latter became President of the Republic), aimed to maintain the long-term conditions for investment. It took direct interest in problems of economic development and of Southern Italy without ever abandoning monetary control. The instruments of monetary policy consisted of discount rates and central bank advances - which, however, held stable for eight years from 1950 to 1958 - and control of credit, in part through moral suasion. Periodically, excess liquidity was mopped up via bond issues.

Banking supervision was directed primarily to avoiding the repetition of episodes of asset illiquidity. An effort was made to align the structure of the banking system with industry: hence the encouragement of smaller banks, presumed to be more closely tied to small businesses (localism). In 1960 Guido Carli was named Governor of the Bank. In the years that followed, the economic structure of the country was gradually transformed. More and more the role of the credit system was to reallocate resources between consumption and investment and between the public and private sectors. From the mid-1960s onwards monetary policy was oriented to stabilizing security prices, to facilitate the placement of issues and thereby encourage investment.

The Research Department perfected its analytical instruments, most notably with the construction of the Bank of Italy's econometric model and the realization of the "financial accounts".

As regards the credit system, for the first time since the 1930s banking mergers were encouraged, in order to enhance technical efficiency, but definitely excluding a return to universal banking. The Central Credit Register was established.