Last April 16, together with Alberto Quadrio Curzio, I proposed from the columns of Il Sole 24Ore, a project (Bankoro) aimed at enhancing our gold reserves without selling them; it would also make it possible to promote investments for economic recovery. The project resolves the question of the ownership structure of the Bank of Italy which a 2005 law establishes must be owned by the State or other public entities according to implementing procedures to be specified in a specific regulation; it should have been enacted so as to allow the transfer of quotas within three years (ie by December 2008), but this did not happen. In the debate, some have even gone so far as to consider it illegal for via Nazionale to fall under total public control, hoping that that legal provision will be repealed.
The current state of the institution, as well as being irregular, is unpresentable by configuring a vigilante possessed by his supervised ones. Although the independence of the bank and the autonomy of its management are guaranteed by the European system of central banks, the role of supervised institutions in administration is far from marginal. Their assembly appoints the 13 members of the Superior Council who, among other things, give the Council of Ministers their opinion on the appointment, renewal and revocation of the Governor. While I am personally certain of the neutrality of Bank of Italy's conduct, I nonetheless believe that the questions that could be artfully raised on a different alleged treatment of the various subjects subjected to inspection should not be underestimated ("Cesare's wife must be above all suspected").
The origins of our central bank date back to 1849 when Camillo Benso di Cavour wanted the two Savoy issuing institutions, Genoa and Turin, to be united under the title of Banca Nazionale. Until the crisis of 29, the shares of the Bank of Italy (so called since 1893) were the main securities traded on the stock exchanges of Genoa, first, and Milan, then (see my article in Consob, Dall'Unità ai oggi : 150 years of the Stock Exchange in Italy; 2011; www.consob.it). But in 1936 the regime changed and from an anonymous company of private shareholders the Bank of Italy became an institution governed by public law. In this reform, the fact that the collection of savings and the exercise of credit were functions of public interest and that the central bank must be free from any private speculation counted.
The new law established that private shareholders were reimbursed at book value (1.300 lire per share) and that the capital paid up for 300 million was contributed again by entities mostly controlled by the Treasury (savings banks, institutions and banks public, social security and insurance institutions). This formula - Enrico Cuccia commented in February 1997 in a paper on the inclusion of banks in the European system, published by the Ugo La Malfa Institute - "could be considered valid in a regime committed to maintaining the presence of the public hand in the banking system [...] a screen was placed between the Bank and the Government, which in a totalitarian regime was a tissue paper screen and in a democratic regime cannot be reconciled either with the need to privatize the banking system, or with the criterion (current in other countries of the Community) which wants the issuing institution under the direct control of the Treasury" (the document is on the website of the Mediobanca Historical Archive).
Cuccia's words were not taken into account when the governments of the following years proceeded to privatize the public banks, so that even today the vast majority of the capital of the Bank of Italy (94,33%, see Annuario R&S 2013, p. 1034 ) remains in private hands with the aggravating circumstance that these are entities it supervises, i.e. banks and insurance companies. The first three (Intesa Sanpaolo, Unicredit and Generali) alone hold 71% of the shares.
A private structure characterizes the historical origin of many central banks; but what are the prevailing forms that make up the best practice today? The rule, as Enrico Cuccia already said 15 years ago, is that they are owned by the state. In fact, of the other 16 central banks in the eurozone, 14 are 100% owned. Most of these are public law entities; among the most important, the Banque de France, the Deutsche Bundesbank and the Banco de España have this nature. There are two atypical cases. The first concerns the Banque Nationale de Belgique which is an anonymous company listed on the stock exchange; the state participation is in any case the majority (50%) while the remaining 50% is free float and distributed to the public. The second exception concerns the recently reorganized Central Bank of Greece. The institute is 100% owned by the National Bank of Greece which is a listed company, in turn 84% owned by a state fund (HFSF Hellenic Financial Stability Fund).
Outside the eurozone, the Bank of England is wholly owned by the state after its nationalization in 1946. In 1931, having abandoned the gold standard, the Treasury had taken away all its gold and foreign exchange reserves. In Japan, the central bank was born in 1882 on the Belgian model and maintains a dual ownership structure: the State holds a 55% stake and the rest is disclosed to the public; the Bank of Japan is also listed on the stock exchange, but with little success given that since 1999 it has lost half of its value, albeit with large ups and downs. The shares of the other listed company, the Banque Nationale de Belgique, instead ensured an average annual return of 5,7% in the same period. The Canadian, Australian, Indian and Brazilian central banks and those of the former communist countries are fully public. A curiosity: the central bank of San Marino is 70% owned by the State and the remaining 30% by four local banks (here too, on a smaller scale, the vigilante participated by the supervised is proposed again, but the first alone controls all the assemblies).
Finally, it should be remembered the American system of the federal reserve, led by the Federal Reserve Board (FRB) where sit seven governors appointed by the President of the United States with the approval of the Senate (between them, the President and Vice-President are designated with the same procedure) . The system operates through 12 federal reserve banks whose capital "must" be subscribed by the institutions that want to carry out the banking activity. It is therefore a general obligation which involves an investment equal to 6% of one's own capital (today only half of which is called up) and takes the form of shares entitled to a 6% dividend, but which cannot be traded. The effectiveness of this system, which will celebrate its centenary on December 23, is not the best if we consider that it has not been able to prevent the numerous financial crises that have exploded over time, most recently the one that still torments us.
Each Federal Reserve Bank is managed under the supervision of a Board of Directors which consists of nine members appointed two-thirds by the shareholders (half representing them and half representing the non-bank sectors) and one-third by the FRB in ideal representation of the public; the FRB also appoints the President. If it is true that the latter boast a certain independence (for example in the Federal Reserve Bank of New York there is the president of the Metropolitan Museum of Art who is also President of the Board of Directors of the bank), the presence of representatives of commercial banks and large company remains a harbinger of conflicts of interest.
In summary, the best practice is that central banks are wholly owned by the state. The exceptions are marginal and due to historical reasons. The only significant case of a totally private entity that I remember for the last post-war period concerns Iran where the issuing functions were entrusted to the powerful private bank Melli until 1960 when it was replaced by a public entity (see the my essay on Iranian Studies, vol.46, n.4, 2013, p.607).
