Bank Foundations and Urban Governance in the Austerity Era: The Italian Case

Over the last decades, European cities have been facing serious constraints. In particular, decreasing transfers from central governments and the introduction of domestic ‘Stability pacts’ have significantly reduced the leeway of city leaders. Within this context, Italian cities have also been interested by a further phenomenon. In 1990, the national government privatized all the public banks and established the ‘bank foundations’ as majority shareholders of the banks with the obligation to reinvest the dividends in public interest projects. Over the years, these institutions have significantly increased their investiments in the urban areas, projecting and implementing policies in the fields of culture, education, research and social assistance. This paper aims at presenting the findings of an ongoing research project on the role of Italian bank foundations in urban governance. The paper offers an overview of the phenomenon in the Italian urban contexts and an in-depth analysis on the three major Italian cities hosting bank foundations with an equity of over one billion euros: Milan, Turin and Rome. In particular, the comparative analysis focuses on two main questions: Do bank foundations investments soothe the effects of the austerity measures imposed by the national government? How do these new institutions affect urban policy-making processes and city leaders’ strategies?