Distribution of bank offices in fascist Italy: a historical accident? New evidence from provincial data (1927–1936)

Abstract This paper examines the geographical distribution of bank offices in fascist Italy between 1927 and 1936, a period of critical banking consolidation, marked by the Great Depression and culminating in the 1936 banking law. We contribute to the ongoing debate between the Italian banking history literature—which emphasizes the complex interplay of economic, technical, and political factors—and the empirical economics literature, claiming the distribution of banks in 1936 as quasi-random: a “historical accident.” We fit into this debate by constructing a novel, detailed dataset of provincial-level economic and banking indicators for late 1920s Italy. With OLS regression and Principal Component Analysis, we rigorously assess the relationship between pre-Depression economic fundamentals and banks’ spatial organization. We document a strong and persistent correlation between the 1928 and the 1936 branch networks, and that local economic conditions are good predictors of both the 1928 and the 1936 spatial distributions. Our findings challenge the “historical accident” narrative by showing that market forces fundamentally shaped Italy’s banking geography through the consolidation period. This research re-contextualizes the 1936 banking law not as an arbitrary political imposition, but as a codification of market-driven evolutions.