Shaping a coordinated credit network in pre-modern and modern Italy

Monetization and credit innovations were closely tied to European economic development from the beginning of the thirteenth century. Italian city-states played a pivotal role in this development. They pioneered highly innovative financial instruments and played a crucial role in the development of new credit facilities, such as public banks and Monti di pietà (communal pawn banks). In the early modern period, the main cities of the peninsula were home to an original organization of the credit market, which sought to build up a social ethos by reconciling business imperatives and ethical concerns. Political and financial upheavals at the turn of the nineteenth century, forced a deep and painful renewal of the system. A new stock of credit institutions took hold. Ethical and social concerns remained high, but the main approach shifted. Access to credit expanded its territorial and social reach dramatically, but its goal was no longer to provide emergency relief in times of distress, but to encourage thrift, self-help, and to promote social and economic pro- gress. This gave birth to a new form of social banking – savings and coopera- tive banks – which played a crucial role in the development of Italian society until the banking reforms of the 1990s.