Between the end of 2013 and the beginning of 2014, a radical reform of Banca d’Italia – the Italian central bank and banking supervisory authority – was enacted. It was the last chapter of an historical evolution, started in 1893 with its incorporation as a joint-stock-corporation under private law, whose result places the Italian system within the niche of countries that entail the participation of private investors to the ownership and governance of central banks. This article analyzes the relevant Italian regulation also by comparing it with other international experiences. While most of the debate on central banking independence focuses on in- dependence from politics, this article explores another side of the problem, namely the risk of capture by the banking sector and of subsequent conflicts of interests. Said risk significantly increases when the central bank’s shareholders are private investors which elect some of its governing bodies and receive dividends out of its earnings. Since a central bank carries out monetary operations that generate seigniorage, the distribution of profits out of these earnings is a transfer of public value to the private sector. Such circumstances can create incentives for the owners to influence the central bank’s decisions, also ac- cording to the magnitude of the values at stake.

Spolaore, P. (2020). Ownership and Governance of Central Banks: Insights from the Italian Experience. EUROPEAN COMPANY AND FINANCIAL LAW REVIEW, 17(6), 619-656 [10.1515/ecfr-2020-0030].

Ownership and Governance of Central Banks: Insights from the Italian Experience

Spolaore, P
2020

Abstract

Between the end of 2013 and the beginning of 2014, a radical reform of Banca d’Italia – the Italian central bank and banking supervisory authority – was enacted. It was the last chapter of an historical evolution, started in 1893 with its incorporation as a joint-stock-corporation under private law, whose result places the Italian system within the niche of countries that entail the participation of private investors to the ownership and governance of central banks. This article analyzes the relevant Italian regulation also by comparing it with other international experiences. While most of the debate on central banking independence focuses on in- dependence from politics, this article explores another side of the problem, namely the risk of capture by the banking sector and of subsequent conflicts of interests. Said risk significantly increases when the central bank’s shareholders are private investors which elect some of its governing bodies and receive dividends out of its earnings. Since a central bank carries out monetary operations that generate seigniorage, the distribution of profits out of these earnings is a transfer of public value to the private sector. Such circumstances can create incentives for the owners to influence the central bank’s decisions, also ac- cording to the magnitude of the values at stake.
Articolo in rivista - Articolo scientifico
Central banks; central banking; banking supervision; seignorage; governance; financial supervision; banking law; European Central Bank; Banca d'Italia; FED;
English
9-dic-2020
2020
17
6
619
656
reserved
Spolaore, P. (2020). Ownership and Governance of Central Banks: Insights from the Italian Experience. EUROPEAN COMPANY AND FINANCIAL LAW REVIEW, 17(6), 619-656 [10.1515/ecfr-2020-0030].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/298720
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