LUIGI EINAUDI, GOVERNOR OF THE BANK OF ITALY (1945-1948)

Luigi Einaudi was appointed as the governor of the Bank of Italy before the end of the war with a very broad mandate. He utilized this mandate to restore the Bank’s autonomy in the fields of monetary policy and bank supervision through internal reorganization and active pressures to change regulation and legal norms. The governor was, thus, able to regain the role of “bank of the banks” instead of that of “bank of the Treasury” to the Bank of Italy. Moreover, during Einaudi’s governorship, the Bank was strongly committed to Italy’s gradual participation into the new international economic order. The governor also faced the duty of putting excessive inflationary dynamics under control. In this respect, Einaudi postponed the stabilization policy to 1947 due to its priority objective of supporting the Italian economic recovery by means of abundant flows of bank loans. However, when implemented, the monetary intervention was successful in stabilizing the economy. These factors imply that governor Einaudi prepared the Bank to play a crucial role in the following evolution of the Italian economy.