Resilience through legitimacy: prudent accounting and governance continuity of an Italian bank in the long run (1891–1972)

Framed within legitimacy theory, this study examines how accounting and governance practices sustained the long-term resilience of local banking in Lombardy between 1891 and 1972. Focusing on the Banca Cooperativa Commerciale di Milano – later Banca Milanese di Credito – the analysis examines over 80 years of archival accounting data, board minutes, and financial statements which, despite minor gaps, allow for the reconstruction of key financial indicators and governance dynamics. It explores how prudence, transparency, and continuity in governance operated as mechanisms of moral and cognitive legitimacy, enabling the bank to maintain stakeholder confidence across crises, regime changes, and regulatory reforms. The evidence shows that legitimacy was not a passive inheritance but an accounting achievement: a resource materialised through conservative valuation, stable leadership, and disciplined disclosure. By situating the analysis within Lombardy's dense network of territorial banks, the study highlights how these institutions linked civic trust with financial stability, revealing the moral foundations of their resilience and the enduring contribution of local finance to the credibility of the financial system.