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Through the analysis of the Credito Italiano balance sheets between 1929 and 1934, it is possibile to highlight an aspect of the way Italian financial capitalism, born after the bank crisis of the end of the XIX Century and developed in the course of the Giolitti's Age to support the industrial enterprise, turned into a sort of "institutional capitalism" that had its landmark in IRI of the 30s. This story can be represented through three chronological phases. In the 20s, until 1929, the net profit of the bank represented an "indipendent variable": on the basis of the profit expectations of its most important shareholders, who were at the same time part of the bank Board and of some of the big companies financed by the latter - as Agnelli or Feltrinelli -, the balance sheet was faked to obtain the preset result. This outcome was made possible by a secret accounting created in 1915 that had been widely used in the course of the 20s to hide losses and to set aside concealed funds, as also to corrupt political characters. 1929 represented a sort of point of no return for the bank, as also for Italian capitalism. The unprecedented and important losses on the investment portfolio of the Credito Italiano stressed its Board to fake the balance sheet in so deep and unusual a way that could not be compared with the past. It had become no longer possible to cover the increasing losses induced by the devaluation of titles thanks to the secret accounting. In the second time of this story, the Monetary Authority (Banca d'Italia) and the Government started to exert a growing and invasive role in the control management of the bank. Left the great part of the portfolio investment to financial societies expressly created to host them (Elettrofinanziaria and its "connected societies" and then also Società Finanziaria Italiana), the Credito Italiano also showed a serious difficulty to face increasing credit losses. Since 1933, in the third time of this story, the State decided its direct intervention through IRI to take over the devaluated credits and titles of the bank and of its financial societies. Credito Italiano converted into an ordinary bank and its net profit then became a variable depending on an evaluation process based on a "prudent management". The net profit determination turned into a sort of collective and institutional process planned together with public authorities.

Credito Italiano, balance sheet, secret accounting