Social Aims of Finance Rediscovering Varieties of Credit in Financial Archives
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Social Aims of Finance Rediscovering varieties of credit in financial archives Editors Anna Cantaluppi, Chloe Colchester, Lilia Costabile, Carmen Hofmann, Catherine Schenk and Matthias Weber Social Aims of Finance Social Aims of Finance Rediscovering varieties of credit in financial archives © eabh, Frankfurt am Main, 2020 All rights reserved. Cover photo: Headquarters of Istituto delle Opere Pie di San Paolo, early 20th century. Copyright: Torino, Archivio Storico della Compagnia di San Paolo. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. Produced and distributed by eabh (The European Association for Banking and Financial History e.V.) in cooperation with Fondazione 1563 per l’Arte e la Cultura della Compagnia di San Paolo. Editors: Anna Cantaluppi, Chloe Colchester, Lilia Costabile, Carmen Hofmann, Catherine Schenk and Matthias Weber The papers included in this volume are a selection of those presented at a joint eabh and Fondazione 1563 conference in 2018 in Turin, Italy. The title of the conference was ‘Social Aims of Finance’. The title of the workshop was ‘Good Archives’. The conference and the workshop in Turin were organised with the support of Fondazione Compagnia di San Paolo. ISBN 978-3-9808050-7-0 ISSN 2303-9450 License CC BY NC ND Other titles in this series Clement, P., C. Hofmann, J. Kunert (eds.) (2018), ‘Inflation, Money, Output’ (Frankfurt am Main). Ikonen, V. and D. Ross (eds.) (2014), ‘The Critical Function of History in Banking and Finance’, (Frankfurt am Main). Produced & distributed by: Working in partnership with: 3 Social Aims of Finance Acknowledgments We are grateful to all members of eabh whose support makes our work possible. We would like to thank Fondazione Compagnia di San Paolo and Fondazione 1563 per l’Arte e la Cultura, in particular Anna Cantaluppi, former Director of Fondazione 1563 per l’Arte e la Cultura della Compagnia di San Paolo, for initiating and following through with this project. Thank you to the editors and all authors of the volume. Further we are much obliged to Gabriella Massaglia (eabh) and the editorial team of Fondazione 1563, namely: Elisabetta Ballaira, Virginia Ciccone, Mariastella Circosta. 5 Social Aims of Finance Table of contents Piero Gastaldo 09 Foreword Joost Jonker 10 Introduction 01 Catherine Schenk 21 Uses of the past in banking and financial history Social aims of finance and history 02 Mauro Carboni & Massimo Fornasari 30 Between ethics and profit Shaping a coordinated credit network in pre-modern and modern Italy 03 Lilia Costabile 51 Keys to financial success of socially oriented banks The Neapolitan ‘banks of the charities’ 04 Claudio Bermond & Fausto Piola Caselli 75 The Compagnia di San Paolo in Turin Charity and credit (16th to 20th centuries) 05 Maximilian Martin 85 The contemporary history of impact investing An interpretive political economy perspective on the ecosystem 06 Klaus Weber 111 Social entrepreneurship The Rothschilds as bankers and philanthropists (1850-1914) 07 Olivier Butzbach 133 British building societies 1970-2010 The changing conditions for a viable not-for-profit alternative in a financialised economy 08 Christopher L. Colvin 155 Whose self-interest? Social elites, religious competition, and the rise of Raiffeisen banks in the Netherlands 6 Social Aims of Finance 09 Tom Petersson 181 Adapting to a changing world Swedish savings banks in the 21st century 10 Anna Cantaluppi 199 Tracing the connections between charity and banking in the Archives of Compagnia di San Paolo 11 Armando Antonelli 217 The administration of political decisions on credit The minute books of the Monte di Pietà of Bologna in the sixteenth and seventeenth centuries 12 Concetta Damiani, Claudia Grossi & Gloria Guida 234 Evolutionary archives From description to narration 13 Jane Boyko 242 Bank of Canada Archives Background, reinvention and renewal 14 Mariusz Lukasiewicz 259 Johannesburg’s financial globalization (c.1880-1910) and South African financial archives 15 J. Howard M. Jones 274 Good businesses and good archives Perspectives from the records of a moneylender in rural India 16 Pascal Pénot 291 The Crédit Agricole Archives 17 María de Inclán Sánchez & Elena Serrano García 302 Project for recovery of Spain’s banking archives 18 Valérie Mathevon 318 The historical archives of the European Investment Bank A non-profit European Union institution Annexes 326 7 Social Aims of Finance Foreword In June 2018, one hundred and fifty people -archivists, historians, econo- mists and finance experts- from Europe, the United States, Canada and Africa attended the congress organized by Fondazione 1563 and eabh (The Euro- pean Association for Banking and Financial History e.V.), supported by the Fondazione Compagnia di San Paolo in Turin. This was a source of great sat- isfaction and pride for Fondazione 1563, given its commitment to supporting research and higher education in the humanities, as well as the management and development of the Historical Archive of Compagnia di San Paolo itself. Having been members of eabh for several years, we were delighted when they let us host the association’s annual congress on a topic of our choos- ing. The ‘Good’ Archives’ workshop took place alongside an academic confer- ence ‘Social Aims of Finance. The speakers examined the connection between banking and charity, between ethics and profit, between social responsibility and longevity of credit in a range of financial institutions. The conference sought to expand research in this field. Papers ranged from Italian Monte di Pietà in the Middle Ages to the recent advent of contempo- rary impact financing, from rural moneylenders in Western India to the mutu- alism of French agricultural credit, from the Swedish savings banks and the British building societies to the German and Dutch Raiffeisen banks, from Rothschild philanthropy to the public economic and social aspects of the Italian banking system, from the Spanish bank archives to those in Canada and South Africa. Now, we are delighted to publish the majority of the papers presented at the congress, many of which have been developed by further insight over time. We hope that this overview will prompt reflection on sustainable models of finance in the evolving context of the global market economy. I would like to thank the editors, the authors and the editorial staff at eabh for the great work they have done. Piero Gastaldo Chairman of Fondazione 1563 per l’Arte e la Cultura della Compagnia di San Paolo 9 Social Aims of Finance Introduction Joost Jonker1 Author’s biography Joost Jonker studied economic and social history at the VU University Amsterdam. After obtaining his PhD from Utrecht University he worked as a consultant-researcher with Stratagem Strategic Research and RAND Europe, mostly on aviation-related matters. Having moved to Utrecht University, he widened his research interests to embrace business and financial history from the 16th century to the present. Since 2012 he occupies the NEHA Chair in Business History at the University of Amsterdam, which he combines with a position as Senior Researcher at the International Institute of Social History in Amster- dam. Jonker wrote or co-wrote books on Dutch interna- tional trading companies, a company history of Royal Dutch Shell, and numerous articles on business and financial history. 1 NEHA Professor of Business History, University of Amsterdam, and Senior Research Fellow, International Institute for Social History; Amsterdam. [email protected] 10 Social Aims of Finance Introduction The social aims of finance are self-evident. Theoretically, that is. Finance facil- itates or perhaps even boosts growth by providing key services such as pay- ments and accumulating and allocating capital (Merton and Bodie, 1995). Financial innovation counts as a key factor in this, because it provides new products that attract more investors into the market, thereby increasing its liquidity and, in turn, creating room for further new products (Merton, 1990). However, throughout history, and increasingly so since the 2008 cri- sis, finance has been heavily criticized for its lack of usefulness, its high cost, indeed for its alleged damage to society. The charge sheet is a long one: from medieval rack-renters, usury, the artificial creation of money shortages, the hoarding of good coin, to more recent accusations of rent-seeking, abuse of asymmetric information, miss-selling and overselling of products, rigged rate setting, faking client accounts, extreme remuneration, excessive speculation producing bubbles and crises, manipulating markets and duping investors by pumping up valuations, gambling with futures and options, shady deals, insider trading, and money laundering. The financial sector habitually ignores regu- lations imposed to protect the public interest. Between 2008 and 2019 the world’s leading banks paid a total of at least 36 billion dollars in fines for com- pliance failures.2 And even then, we have failed to mention a host of other mis- demeanours: serially recurring mismanagement, Ponzi-type crooks, and down- right fraud like BCCI in the 1980s or Wirecard in 2020. With so many bad apples it’s sometimes hard to believe the sector still produces healthy fruit. Yet it does, or at least it can do, given the right circumstances. What might they be? The 2018 eabh conference in Turin discussed that question and the papers in this volume all tackle it from a variety of different angles. Let me start by distinguishing four points regarding the social aims of a busi- ness, and more specifically a financial services business. The first point, and the most obvious one, is the Corporate Social Responsibility (CSR) dimen- sion; second, commercial businesses targeting particular social groups and often also owned by them, such as savings banks, mutual building societies, and co-operative banks; third, businesses providing financial services to par- ticular groups as a charity; fourth, businesses or businessmen devoting part of their time and/or money to social, societal, or cultural purposes.