Proposal preview

The commercial and industrial activities of central banks, 1914-2014

This panel will examine some hitherto neglected aspects of the evolution of central banking from a historical and global perspective. In particular, it will consider the private sector business of central banks from the First World War to the present day. Orthodox theory excludes the possibility that central banks engage in market and industrial activities and hold equity investment. In contrast to received narrative, however, historical evidence shows that central banks have been heavily involved in private sector commercial activities and other aspects of the economy in ways that are often ignored. Despite their change in legal status from private, joint-stock profit banks to state-owned institutions from the 1930s, and despite gaining independence from governments after the 1980s, this involvement seems a historical regularity which cannot be dismissed as sui generis.
Evidence suggests that after crises this involvement grew in importance. As a consequence of economic and financial crises, monetary orthodoxy was often replaced by experiments in industrial policy-making under political pressure, but also because of market failures and the inability of commercial banks to finance certain sectors of the economy. After the First World War and after 1929, European central banks – from the Bank of Italy to Bank of England, from the Banque de France to the Reichsbank – accumulated substantial commercial portfolios, becoming leading industrial players and spearheading forms of state intervention in industry. After 1945, many central banks continued to provide industrial finance, while in the developing countries they proved instrumental in the definition of long-term economic and industrial policies, providing, in many cases, personnel and managing directors to state-owned enterprises. Again, after 2008, in a search for yield, many central banks – including the Bank of Japan the Netherlands National Bank, the ECB, the Swiss National Bank and the People’s Bank of China – have amassed substantial equity investments in different ways.
Was intervention an aberration or the norm? In what circumstances did central banks engage in commercial and industrial activities? In providing industrial finance did they simply compete with commercial banks or did they seek to deal with market failures? In what ways was the search for yield correlated to government budget constraints and deflation? How does the experience of central banks in developed economies contrast with newer central banks? We will issue a call for papers and host a pre-conference to extend participation as widely as possible.

Participants will include:
Valerio Cerretano (UK)
Catherine Schenk (UK)
Gerald Epstein (USA)
Olivier Feiertag (France)
Pierre Siklos (Canada)
Masato Shizume (Japan)


  • Catherine Schenk University of Glasgow UK
  • Valerio Cerretano University of Glasgow UK

Session members

  • Valerio Cerretano, University of Glasgow
  • Catherine Schenk, University of Glasgow
  • Gerald Epstein, UMass Amherst
  • Olivier Feiertag, Universite' de Rouen
  • Andrew Filardo, BIS
  • Pierre L Siklos, Wilfrid Laurier University
  • Masato Shizume, Waseda University
  • Hiroyuki Sugamoto, Waseda University
  • Lilia Costabile, University of Naples, Federico II


  • Valerio Cerretano University of Glasgow
  • Catherine Schenk University of Oxford Catherine. schenk@

This panel has Call for Papers open.
If you are interested in participating, please contact the panel organizer(s) to submit a proposal.

  • Catherine Schenk, University of Glasgow,, UK
  • Valerio Cerretano, University of Glasgow,, UK


Panel abstract

After a long period of neglect, the theme of the involvement of central banks with industry and development has lately received renewed attention from scholars and practitioners alike, as central banks, in the aftermath of the 2007 global economic crisis, came once again to be involved with broader government plans for the purchase of company assets (i.e. Chrysler) or with the formulation of measures of ‘unconventional’ monetary policy which have swelled central banks’ balance sheets significantly. To what extent is this involvement an aberration or the norm in the evolution of central banks and central banking? This panel will attempt this fundamental question in the belief that there is an urgent need for a more systematic and global long-term analysis of how central banks have accumulated industrial assets and influenced development, as well as the allocation of long-term finance, in the Western World since 1918.

1st half

The Role of Financial Regulation for Effective Developmental Central Banking

Gerald Epstein

Central banking and economic development in West Africa (1973-1983)

Olivier Freiertag

Central banking and price stability in Ricardo

Lilia Costabile

The central bank's balance sheet: beyond monetary policy?

Andrew Filardo and Pierre L. Siklos

2nd half

The industrial intervention of central banks: Britain, Italy and France, 1918-1973

Valerio Cerretano

Industrial policy, equity finance and the Bank of Japan in a historical perspective

Masato Shizume

The Bank of England, industrial intervention and the Vickers-Armstrong merger in the inter-war period

Hiroyuki Sugamoto