IDEAS home Printed from
   My bibliography  Save this article

Economic crises and the development of the industrial state: the industrial intervention of the Bank of Italy and the Bank of England, 1918–1939


  • Valerio Cerretano

    (University of Glasgow)


Although it is little known at least among economists, central banks in industrial countries became involved with industry in the past and particularly after the First World War. This was at least the case in Italy and Britain where central banks provided long-term finance to ailing firms and banks, becoming important industrial players in their countries. This article explores this episode in a comparative setting, and concludes that intervention did not stem from a grand design of policy or from anti-market ideologies. It was, rather, piecemeal and a consequence of financial austerity. It is also argued here that intervention was the outcome of the over-expansion of the heavy industries more than the consequence of the weakness of one particular financial system. Moreover, this history also seems to indicate that the direct management of ailing firms and banks proved less expensive for central banks than the continuous provision of funds to concerns whose managers were alien – and therefore unaccountable – to the central banks' bureaucracy.

Suggested Citation

  • Valerio Cerretano, 2013. "Economic crises and the development of the industrial state: the industrial intervention of the Bank of Italy and the Bank of England, 1918–1939," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(3), pages 314-321, January.
  • Handle: RePEc:elg:rokejn:v:1:y:2013:i:3:p314-321

    Download full text from publisher

    File URL:
    Download Restriction: Restricted access

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item


    central banks; industrial policy; public intervention in industry;

    JEL classification:

    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N2 - Economic History - - Financial Markets and Institutions
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:elg:rokejn:v:1:y:2013:i:3:p314-321. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katie Smith). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.