Banks and Territory: Investigation in Knowledge and Building New Relationships between Territorial Banks and Local Actors

A series of events in the late 1980s, such as the process of market globalization, the birth of virtual economy, the decrease in interest rates, made banks develop a sort of schizophrenic view of the market: on one side, in a scenario of globalization, they wanted to have contacts with international markets, in a logic which should have put an end to the geography of markets (R. O’Brien 1992); on the other side, during the 1990s, banks felt there were strong information asymmetries between suppliers and beneficiaries of funds. Because these asymmetries increased with geographical distance, banks felt the need to specialize and find their own place in the territory or, in other words, the need to pay attention to local economy. Moreover, at the beginning of 2000, the big banks had to admit that the profits derived from the management of savings, had consistently been reduced because of the crash in stock markets and the financial crisis of some Latin American countries and industrial giants like Enron, World Com. and Parmalat-Cirio. To these events it must be added the great crisis of 2008 yet existent. The brief arguments of these pages, regarding the phenomenon of globalization in real economy and the changes occurred in the financial intermediary sector, imply that one of the focal points for social, economic and cultural development in Europe and above all in Italy today is shaping the relationship between the banking system and territory, i.e. business, local and functional autonomies and socio-cultural actors. The philosophy that inspires the local bank is the awareness of being a firm, supporting other firms in their development, and grows together with the economic area where it operates. The local bank will be able to carry out the task of reducing the risk of the lack of information, which is fundamental for the development of the territory, because it is a well -rooted local institution serving the local community.. Finally, it is argued that the territorial banks adopting an organizational structure characterized by a decision-making centre, rather than different centres (as is the case for banks to medium/large) can better to use and to encode sensitive information and qualitative than bigger banks. The territorial continuity between the creditor and the debtor allows the first to have at, no cost, a large amount of information, reducing informational asymmetries (Sharpe, 1990) and reducing the phenomenon of credit rationing (undergone primarily by small businesses) and at the same time the Bank sufferings. The contribution tries to find a confirmation of claims exhibit, by conducting an empirical analysis which has as reference Italian credit institutions “popular banks” and “cooperative credit banks”.