The Anatomy of a Banking Crisis. The Case of the Catholic Banks of the Veneto Region in the Late 1920s

This essay deals with a little known episode of Italian financial history: the crisis of Catholic banks during the twenties. Taking into account the significant number of banks involved (about fifty), the field of investigation is limited to the Catholic banks of Veneto region. The study is conducted on documents consulted at the Bank of Italy’s Historical Archives and the Intesa-Sanpaolo Historical Archive. Even considering the plausible thesis on the existence of a strategy of the fascist regime aimed at weakinig the system of Catholic banks, the causes of the crisis must be sought elsewhere. Though the macroeconomic and institutional context certainly played an important role, the consulted documents bring out the responsability of the men that managed the banks. First of all, to improve their business, flattered by easy earnings, they understimated the risks to be involved in industrial investments, not only as borrowers but also as shareholders. Then, they were hiding the real financial situation of the banks through accounting manipulation and through equity crossings between banks. The latter contributed to complicate the actions of the authorities, whose late decisions undoubtedly damaged the depositors rights.