Luigi Einaudi as Governor (1945-1948). Postwar, reconstruction and stabilization

This paper analyzes the history of the Bank of Italy during the governorship of Luigi Einaudi. Appointed in January 1945, Einaudi pursued a broad mandate: to re-build the Bank’s autonomy in the different fields of monetary, exchange rate and supervisory policies; to support the integration of the Italian economy into the new international order; to reaffirm its role as “the bank of banks” while limiting its duties associated with the “the bank of the Treasury”; and to strengthen the central bank’s technical reputation in order to contribute more effectively to major economic policy decisions. Before long, the crucial objective became the control of the inflation dynamics. However, Einaudi postponed stabilization measures until early 1947, prioritising monetary support for economic recovery through bank financing. The subsequent implementation of monetary stabilization proved highly effective. This paper argues that Einaudi’s governorship equipped the Bank of Italy with key institutional and policy tools, enabling it to play a crucial role in the subsequent development of the Italian economy.