Border Effects on Local Banking Systems. The Swiss-Italian Frontier between the two World Wars (1914-1945)

Drawing on a large body of literature about the border effects on economic integration, this paper focuses on the consequences a frontier could exert on the local banking systems of two areas located on the Swiss-Italian boundary, over the years between the First and Second World War. It then compares the Italian province of Como and the Swiss canton of Tessin, highlighting the specific characteristics of their banking systems and trying to clarify how their evolution has been influenced by the proximity of a political border and by the transformations in the economic and legislative framework of those years, with special regard to the restrictions on trade and foreign exchanges introduced in Italy in the 1930s. Specific attention is devoted to international trade and capital flows across the border. In conclusion, this research tries to speculate how the two banking systems would be structured if they were not separated by any frontier.