Introduction

The 1930s banking crises triggered a sweeping legislative response in many countries, where each regulatory action tended to be crafted in order to address what was considered as the main cause of the recently occurred domestic banking crisis, so as to prevent the break-out of similar ones in the future. Hence, notwithstanding some similarities, each act was country-specific and aimed at eradicating different types of ‘evils’: thus, the usefulness of cross-country analyses. This chapter provides a historical comparison between the 1933 and 1935 US Banking Acts and the 1936 Italian Banking Act, in their parts relative to the redefinition of the links between banks, industry and financial markets.

Our main claim is that the Italian Banking Act differed in this respect more than the – surprisingly scanty – existing comparative literature seems to suggest, particularly because little attention has been given to the second of the mentioned US Banking Acts. We challenge the commonplace conclusion that in Italy, as in the US, the 1930s banking legislation aimed primarily at splitting commercial from investment banking. As well as contributing to historical knowledge, this research question appears to be quite timely as economists, regulators and politicians worldwide are redesigning the new regulatory architecture after the 2007–8 crisis. An in-depth analysis of the historical precursors of the current proposals, and the ‘evils’ they aimed to address, may be useful to gain a better understanding of the current debate and of its policy implications.