Banking and Finance in the Mediterranean: A Historical Perspective by John A. Consiglio, Juan C. Martinez Oliva, and Gabriel Tortella (review)

This book compiles the contributions presented at the Conference on Banking and Finance in the Mediterranean held in Malta in June, 2007. This volume is the first attempt to compile studies focused on banking and finance in the Mediterranean area making an effort to include areas beyond the most well-studied European Mediterranean countries. In this sense, the book presents some original and very useful papers that help us to better understand the rise of modern banking and finance in this area and, particularly, the role played by international relations in most of these financial systems.

This volume is divided into 5 parts and 14 essays. Part 1 concentrates on Malta’s banking history and includes three papers. The first, by Michael Bonello (Governor of the central bank of Malta), explains the singularities of Maltese banking history linked to the high degree of international integration of the island. The paper by John A. Consiglio (University of Malta) suggests the existence of three main periods in Maltese baking history: 1500–1800, 1800–1964, and post-1964. The studies for the first period 1500–1800 are very scarce and little is known about the history of the main financial institutions, the monti (charitable institutions) from the arrival of the Order of St. John to the end of the eighteenth century. In the second period, the French influence during the short period of French occupation and the British influence during the time Malta was a British colony are observed. However, despite the better-known influence of British banking, Consiglio concentrates on the influence of other institutions, such as the Banco di Roma, the Credit Foncier d’Algérie et Tunisie, and some individual figures, such as Biagio Tagliaferro or Louis E. Gadea. The third period dates from the independence of Malta (1964) to the entry of these islands in the EU (2003) and the euro (2008). Part 1 concludes with a numismatic history of Malta by Joseph C. Sammut (Currency Advisory Board and numismatic consultant to the Central Bank of Malta), which contrary to the relatively short history of the banking sector, dates back to Roman times.

Parts II and III focus on the Mediterranean banking system. In Chapter 4, Massimiliano Affinito and Riccardo De Bonis (Bank of Italy) seek to test for convergence in the Mediterranean banking sector in 19 countries: 9 European, 4 Asian, and 6 African. They use two indicators, namely the ratio of loans to gross domestic product (GDP) and the ratio of deposits to GDP, from 1964 to 2005. They find weak signals of convergence among the 19 Mediterranean countries when they use deposits, but a lack of convergence when they use loans. In any case, according to their results, convergence is lower in Mediterranean banking than for the 20 European countries, as expected. Finally, they found two convergence clubs: the African and Arab countries and the European countries. The rest of the chapters in Parts II and III are country studies. The paper by Edhem Eldem (Bogazici University, Istanbul) analyzes the history of the Imperial Ottoman Bank from 1875 to 1914 and explores how the role of this financial institution strengthened ties between Europe and the Ottoman Empire. Iona Pepelasis (Athens University) concentrates on Greek banking and nonbanking financial corporate history (1830–1909), aiming to reconstruct the map of this second type of financial institutions. According to her research, the creation of nonbanking financial institutions in this period was significant and flexible, in response to the changing needs of the Greek economy. Following the analysis of the nonbanking institutions, Juan Carles Maixe (University of la Coruña, Spain) examines the evolution of savings and cooperative banks in France, Spain, and Italy during the nineteenth and twentieth centuries. He aims to detect common...