Stefano Battilossi, Financial innovation and the golden ages of international banking: 1890–1931 and 1958–81

Throughout the twentieth century, the internationalisation of banking was both a factor for, and an ensuing aspect of, rising globalisation. During the period 1890–1931, commercial banks of industrialised countries promoted organisational and process innovations that successfully challenged the dominance of merchant banks in international financial intermediation. International banking re-emerged from interwar nationalistic retrenchment during the late 1950s, when banks exploited regulatory asymmetries to foster the emergence of Eurocurrency markets. Eurobanks provided not only global liquidity redistribution but also portfolio transformation services to corporate and sovereign customers. Financial innovations related to Eurobanking mark a secular discontinuity as they proved to be vehicles of a banking revolution, based on competition, deregulation and wholesale-market funding.