Correspondent Banking and Migrant Remittances: The Case of Banco di Napoli During the First Globalization

Remittances continue to be a vital component of today’s global economy, with correspondent banking and payment systems playing an essential role. Today, as in the past, correspondent banking helps lower transaction costs, offers secure channels for money transfers, and promotes financial stability for migrant families worldwide.

This paper explores the pivotal role of correspondent banking in facilitating migrant remittances during the first wave of globalization, using Banco di Napoli as a case study. Between the 1870s and the First World War, Italy experienced one of the largest emigration waves in its history, with approximately 13 million Italians moving abroad. Most emigrants came from southern Italy, with major destinations including the United States, Argentina, and Brazil. Italian remittances played a significant role in supporting families and local economies in Italy and, on a macro level, helped alleviate the structural deficit of the Italian balance of payments.

Despite the importance of remittances, migrants faced challenges due to limited financial education and the presence of exploitative private agents. To address these issues, the Italian government granted Banco di Napoli a monopoly on remittance collection and transmission in 1901. The bank provided this service through its expanding network of international correspondents, which led to significant growth in its cross-border operations. The Italian government's decision was also influenced by the fact that Banco di Napoli already had a substantial presence abroad through its correspondents. For instance, compared to Banca d’Italia, in 1910 Banco di Napoli had 71 correspondents in Argentina and 57 in the United States (Ministero degli Affari Esteri, 1910, pp. 98-102), whereas in 1900 Banca d’Italia had only two correspondents in New York, both relatively small. Following the establishment of the monopoly, Banco di Napoli's international network expanded further, directly competing with Banca d’Italia and effectively leaving it with no significant presence abroad. Meanwhile, Banca Commerciale Italiana of Milan, the country's main universal bank, remained a valuable competitor (Toniolo, 2022, p. 321).

While existing literature has extensively analyzed Italian emigration during the first globalization (Mittone 1984; Bevilacqua et al., 2017; Chiapparino and Bettin, 2005) and Banco di Napoli’s institutional history (De Rosa 1976), including its remittance monopoly (De Rosa, 1980; Balletta, 1987), there is a gap in studies focusing on how remittances were settled and the role of cross-borders correspondents.

This paper is the first to reconstruct Banco di Napoli’s international network, examining the economic and institutional factors driving the bank’s focus on remittances and the mechanisms it employed to reduce transaction costs, manage currency exchange risks, and build trust between migrants and their families. It addresses key research questions such as: How did Banco di Napoli select its international partners? Were these choices influenced more by external pressures from institutional players (e.g., the government) or by business considerations? How did other banks (both Italian and local) respond to the monopoly, and did they adopt cooperative or competitive strategies toward Banco di Napoli? The paper also highlights innovations in banking technology and communication systems that Banco di Napoli used to meet the needs of Italian emigrants, such as telegraphs and postal orders, which significantly accelerated the transfer process.

By drawing on original sources from Banco di Napoli’s archives, the study aims to contribute to the understanding of Italian banking history and cross-border banking correspondents' operations. Additionally, it will focus on two case studies (the U.S. and Argentina), enabling a comparative analysis of strategies in different contexts. The findings contribute to ongoing debates about the historical foundations of financial globalization and the role of banks in facilitating international economic integration, especially in the context of migration-driven financial flows.

Marianna Astore is an Assistant Professor (Tenure Track) at the University of Insubria (Varese, Italy) and an Associated Member of the Faculty of History and Nuffield College (University of Oxford). She is affiliated with the GloCoBank project, focusing on cross-border banking and migrant remittances. Her main area of expertise lies in European contemporary financial history, particularly in central banks’ monetary and industrial policies during the interwar period. From 2021 to 2023, she held a Marie Sklodowska-Curie Fellowship at PSE (Paris School of Economics), working as the principal investigator of the project “Europe and Its Central Banks: Lessons from History (EUROCBH).” In 2023, she was also appointed as a Jemolo Fellow at Nuffield College (University of Oxford).