Banking and Eurodollars in Italy in the 1950s

This article challenges current interpretations of the rise of the Eurodollar market. It argues that rather than being the exclusive innovation of British banks, the Eurodollar market had also Italian origins. Foreign-currency lending in Italy in the 1950s was characterized by competitive behavior....

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Bibliographic Details
Published in:	Enterprise & society 2023-09, Vol.24 (3), p.759-783
Main Author:	Balaban, Ioan Achim
Format:	Article
Language:	eng
Subjects:	Accumulation American dollar Annual reports Banking Banking industry Banking law Clearing banks Currency Dual enrollment Foreign exchange markets Innovations Interest rates International finance International trade Merchant banks Nonresidents Regulation Q
Online Access:	Get full text
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Summary:	This article challenges current interpretations of the rise of the Eurodollar market. It argues that rather than being the exclusive innovation of British banks, the Eurodollar market had also Italian origins. Foreign-currency lending in Italy in the 1950s was characterized by competitive behavior. I explain the accumulation of Eurodollar deposits by Italian banks as resulting from the fact that nonresident foreign-currency deposits were not subject to reserve requirements. Furthermore, I discuss the attitudes of the Bank of Italy regarding the financing of foreign-currency credits with nonresident dollar deposits (Eurodollars) and compare the Eurocurrency liabilities of Italian banks vis-à-vis those of the City of London. The comparison facilitates an approximate estimation of the size of the Eurocurrency market in the late 1950s and, even more importantly, a recalibration of the view that the City of London was the dominant Eurodollar player from the outset.
ISSN:	1467-2227 1467-2235