The actual effects of supervision on small and medium-sized banks and the local banking market. A micro-analysis of the Italian case (1926-1936)

This paper analyses the Bank of Italy's supervision role vis-à-vis group o small and medium sized local banks in the 1920s-1930s. More specifically, the research aims at analyzing: a) how the supervision was actually exercised, b) the supervision’s impacts on the banks; c) the supervision’s impacts on the local credit market. The analysis, based on archival documents, is conducted at the micro level, focusing on individual banks in a given geographical area (North East of Italy), but it is still embedded in the macroeconomic broader picture. The article shows that, following the introduction of the new rules, the local banking system was reconfigured on a quantitative and qualitative level.