Financial Deepening in the Three Economies

Abstract

The choice of defining the postwar decades up to the late 1970s as a single period – a sort of “Golden Age”1 – is, like any choice of this kind, rather arbitrary. It can be criticized because important innovations, and relevant instability, characterize the financial industry in this period, in all the three countries. As a matter of fact, however, from an institutional viewpoint,

two countries – the US and Italy – kept their regulatory framework largely unchanged from the interwar period. The UK is an exception: the immediate postwar years are characterized by marked government intervention that is far from prewar “inertia”. Later, this policy gave way to an approach of lighter financial regulation, partly to accommodate the increasing role of London as a financial centre.