Stepping in from periphery: The Italbanco’s reorganisation by Comit’s New York branch manager, 1939-1941

Banca Commerciale Italiana (Comit), in the late 1930s, was still the bank of national interest with the largest foreign network of branches and subsidiaries spread across Europe, Africa, and the Americas. In the countries of South America, Comit was present with a bank established in partnership with the Banque de Paris et des Pays-Bas (Sudameris), and other subsidiaries (Banco Italiano of Lima and the Banco Italiano of Guayaquil [Italbanco]). This article aims to unravel how Comit’s network worked for the reorganisation of Italbanco (Ecuador, 1939-1941), whose manager took opportunistic behaviours that led the affiliate into a critical situation. Although Comit's managing director Raffaele Mattioli was constantly made aware of the operations, he let the “periphery save the periphery”. In other words, thanks to the directives of Comit's New York branch manager, Italbanco was put back on track, preventing it from further risky bank shareholdings and, consequently, losses. Starting from the now decades-long studies on social network analysis and social capital, the question that I raise in this paper will hopefully serve as forerunners for further investigation into the governance model of the Comit group in the Interwar period. The queries are: How the bank’s Head office managed to take advantage of its network and dealt with the geographical distance separating it from its subsidiaries spread across other overseas countries? Who were the managers to whom the supervisory tasks were delegated and how they carried out to shore up Italbanco’s liabilities? Did the lack of social capital of Italbanco’s director had a negative impact and encouraged moral hazard on his investment policies? I will try to straighten these questions out by using the documents of the Historical archive of Intesa Sanpaolo Bank. Specifically, I will analyse the correspondence between Comit’s managing director, Raffaele Mattioli, Italbanco’s director (Federico Saporiti) and manager (Emilio Mayer), and Comit’s New York branch manager, Guglielmo Reiss Romoli. Furthermore, this study will include the financial reports of Romoli and of Ecuador’s Superintendencia de Bancos, that will help to get a complete picture of the complex scenario in which the Comit’s subsidiary was at the end of the 1930s. In conclusion, this paper is connected to the scholarly literature focused on the international spread of forms of economic organizations (models of governance, management, and finance), as well as the construction of zones of influence.