Between Charity and Credit: The Evolution of the Neapolitan Banking System (Sixteenth-Seventeenth Century)

Most of the studies on the birth and expansion of the Neapolitan public banks have always been characterized, starting from the writings of Michele Rocco in the second half of the 18th century, by the emphasis on two particular factors: on the one hand, the technical characteristics of the credit document (fede di credito) that characterized these institutions for more than two centuries; and, on the other, the fiscal needs of a Kingdom increasingly tightened in the vice of a scarce circulating currency and the continued demands of money from Spain.Even the last works on the subject, from accounting history to economic theory, have basically maintained this approach, not deviating significantly from the main and consolidated schools of thought and the most accepted methodological approaches.However, an institutional fracture, especially in the economic field, which takes place between one generations can only be the end result of a much longer process. This is because - quoting one of the major scholars of banking and finance in the Kingdom of Naples, Luigi De Rosa - "the economic organization demonstrates greater inertia in organizing a response to the stimuli and the solicitations of innovation, and in any case its proceeding towards change is never linear".The various generations of scholars who have studied the banking system in Naples have privileged literature and sources that start from the identification and demonstration of an initial model in order to arrive at a final model, focusing on the major issues that characterized the passage. Some intermediate phases have been ignored. And it is on these missing links that we would like to dwell on. The aim will be to retrieve the relationship between the parent company and the public bank to explain not only the origins, but also the evolution of a singular and unique model that, unlike other for-profit foreign banks, was the result of non-profit institutions, committed to reconciling with considerable difficulty the assistance /credit binomial, finally creating a unique model of its kind. The intervention will start from the Spanish domination from 1502 to 1707 to make a brief mention of the interventions in the field of poverty, with reference to the demand and the offer of services of "luoghi pii" (assistance institutions) in Naples. We will then show how, in the second half of the sixteenth century, at a time of serious economic difficulty for the Kingdom and the "luoghi pii", and for a wide range of economic, financial and credit activities, the banks dealt with critical economic circumstances . The need to find new financial sources will induce some "luoghi pii" to diversify services and open public money-issuing banks. We will conclude by discussing the difficulties confronted by the institutions involved in combining charity with banking, from which the need to separate the two activities in order to avoid compromising the life of the institutions, and even more so the whole economic, financial and credit system of the Kingdom.