After Southern Italy became part of a new, national state in 1860, its financial sector was radically transformed under Piedmontese influence. This article challenges the conventional wisdom that the aggressive penetration of a Northern credit institution, the future Bank of Italy, into the South following unification harmed the local banking system and highlights instead its transformative role in modernising and deepening regional credit markets. On the basis of new statistics, banking and political records, this contribution shows that the introduction of ‘foreign’ banking from Northern Italy under the auspices of a national, constitutional government resulted in a financial revolution and a democratisation of credit supply to the advantage of the whole South. Public banking under the Bourbons had privileged the needs of an absolute government over those of the private economy and of the capital city over those of the rest of the country, retarding financial development. Credit undersupply and regional fragmentation could only be overcome through the integration of the South within a larger Italian market, in which, however, the lion's share went to a predominantly Northern institution.
Drawing on the history of the Bank of Naples, this article sheds new light on the power struggle between the central government and the Southern elites in Risorgimento Italy. Since unification, the Bank has been portrayed as the archetypal victim of a predatory (Northern) Italian government. This article, by deconstructing the myth surrounding the Bank, shows how this characterisation was carefully crafted by its Neapolitan management. Exploiting to the fullest the new political and economic role they had acquired under the aegis of a constitutional government, the Bank's governors appropriated and invested with new meanings Risorgimento ideals to further the Bank's cause as well as their own. Constantly shifting the focus from finance to politics, they posed as champions of those municipal, regional or even national liberties the government was either unable or unwilling to defend. This narrative provided an ideological smokescreen obscuring the economic and partly private nature of the confrontation between the central government and the Bank, and reinforced the view of a South victimised by the new Italian state still in currency today.
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