Financial Innovation and Resilience

As Ignazio Visco, Governor of the Bank of Italy, says in his Foreword, all economic policy makers today need to re-examine our history to help them confront the challenges of today. This edited volume focuses specifically on the theme of financial innovation and how financial resiliency was achieved in Naples. To highlight both the achievements of the public banks of Naples and their lessons for financial resiliency, the book focuses on financial crises and how they were overcome in Naples in contrast to other European financial systems.

The first section focuses on the development of the public banks unique to Naples. The second section compares those with other banking systems and how they responded to the same shock in 1622, caused by the full mobilization of European belligerents to finance their efforts in the Thirty Years War. The next section compares lessons learned in the rest of Europe over the next century and a half. The final section comes back to original start of the narrative arc to suggest ways that today’s policymakers and thinkers could use the historical experience of the public banks of Naples to deal better with the ongoing problems stemming from the financial crisis of 2007-08.

• financial innovation
• banking
• public banks
• bank finance
• public banks of Naples
• financial systems
• financial resiliency
• financial crises

• University of Naples Federico II, Naples, Italy

  Lilia Costabile

• University of Illinois at Urbana–Champaign, Urbana, USA

  Larry Neal

Lilia Costabile is Full Professor of Economics at the University of Naples Federico II. She received her PhD at the University of Cambridge, where she is also Life Member of Clare Hall. In 2016 she received the Prize of the President of the Italian Republic, awarded by the Accademia dei Lincei, for her research in Economics. She is currently involved in a project on “Minimalism and Activism in Central Banking: Lesson from the History of Economic Thought” funded by the ECB through ESHET. She has published widely in academic journals and is the author of a book on Malthus: Sviluppo e ristagno della produzione capitalistica as well as the editor of Istituzioni e sviluppo economico nel Mezzogiorno, and Institutions for Social Well-Being: Alternatives for Europe.

Larry Neal is Emeritus Professor of Economics at the University of Illinois at Urbana-Champaign, and Research Associate of the National Bureauof Economic Research. Co-editor of the 2-volume Cambridge History of Capitalism, and the 4-volume History of Financial Crises, his books include The Rise of Financial Capitalism: International Capital Markets in the Age of Reason, ‘I am not master of events’: The Speculations of John Law and Lord Londonderry in the Mississippi and South Sea Bubbles, and A Concise History of International Finance: From Babylon to Bernanke.   

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