Banca Commerciale Italiana and the re-establishment of Italy’s international economic relations after the sanctions, 1936-1940

This chapter emphasises the international outreach of the Italian banking system during the interwar period. The focus of this contribution will be on the Banca Commerciale Italiana (Comit) foreign network, which was the most extensive worldwide as compared to Banco di Roma and Credito Italiano (Credit), with a focus on its branches in London and New York, between 1936 and 1940. These three former universal banks 1 played a crucial role in fostering Italy's economic growth during the late nineteenth and early twentieth centuries. They provided essential funding for key sectors of the Italian industry, including shipbuilding, steel, telecommunications, petrochemicals, electricity, and textiles (Brambilla 2011; Confalonieri 1994; De Rosa 1982). Comit's foreign network outperformed that of the other two banks, as it was more embedded in the international financial circuits since it was present in South America with its affiliated banks, 2 but above all in London, where Banco di Roma did not have its own branch, and in New York, where Credit only had a representative office. Furthermore, the chosen timeframe is intended to offer new and preliminary insights into the impact of the implementation of economic and financial sanctions by the League of Nations on the Italian banking sector, through the perspective of a multinational bank (Brambilla 2002, 437–448). In November 1935, Italy declared war on the Ethiopian Kingdom, despite both nations being members of the League of Nations, an international organisation led by the United Kingdom and France. Trade restrictions were imposed on the export and import of goods, particularly military equipment, and munitions, to and from Italy. Notably, Germany and the United States refrained from participating in the sanctions, the latter due to its non-membership of the League. Moreover, the discounting of bills of exchange in London on behalf of Italian banks was hindered, thereby obstructing the potential for short-term financing in trade between Italy and other nations (Arnold 2016; Strang 2013; Clavin 2013; Hufbauer et al. 1990; Ristuccia 2000). This contribution aims to unravel the intermediary role of Comit's London branch through its director, Carlo Lovioz, in keeping export and import flows open from and to Italy. In addition, this study will assess to what extent Comit, through its network of domestic and foreign subsidiaries, has granted loans to Italian shipping companies to purchase merchant vessels, vital for the carriage of goods and raw materials. In this context, the archival sources kept in the historical archive of Intesa Sanpaolo will be employed. This inquiry will involve an examination of the collections of correspondence between the managing director of the Comit, Raffaele Mattioli, and Lovioz. In addition, this chapter will analyse the minutes of the Head Office Committee (Comitato della Direzione Centrale), as these documents provide insight into determining the extent of credits given to support one of the key sectors of the Italian economy (of ‘national interest’), namely, the shipping and shipbuilding industry.