Governing finance: consolidation and control in the Italian banking system

The wave of corporate transactions that reshaped the Italian banking sector in 2024–25 provides a unique opportunity to reassess the relationship between politics and finance in contemporary Italy. Although recent developments have often been interpreted as a new phase of market-driven consolidation, this article argues that they instead reveal a transformation in the forms through which political influence over finance is exercised. Drawing on an analysis of the major banking transactions involving MPS, Mediobanca, UniCredit, Banco BPM, BPER and other key actors, the article shows that the retreat of the State from direct ownership has not resulted in a corresponding reduction of public influence. Rather, intervention has increasingly relied on indirect instruments, including the exercise of golden powers, regulatory discretion, informal political networks and fiscal measures. Building on these developments, the article identifies four principal channels through which politics shapes the financial system–ownership, governance networks, regulation and taxation–and evaluates them against the public-interest objectives that justify intervention in finance, namely financial stability, the protection of savings, the allocation of credit, monetary sovereignty and the functioning of payment systems. The Italian case thus illustrates a broader paradox: privatization may coexist with, and even facilitate, new forms of political control. The article concludes that the key issue is not whether politics should intervene in finance, but which collective objectives such intervention is intended to serve.