Convergence or Diversity? The Italian Banking System between Competition and Social Embeddedness

This article focuses on changes in the European banks strategies and on the major transformations in corporate governance occurred in the period 1997-2007. In this perspective, and in contrast with the tenets of a part of the literature on varieties of capitalisms, we argue that there is limited convergence between coordinated and non-coordinated market economies. In the first part the empirical analysis emphasizes the persistence of a multiple equilibria state at the national level, although trading assets gradually took the place of traditional activities of intermediation in all banks included in the sample. The second part of the paper addresses the Italian case. In particular, our aim is to describe some of the socially driven forces that influence the change in the strategic decisions-making of three major national banks (Unicredit, Intesa-San Paolo and Monte dei Paschi). According to a neo-institutionalist approach within the theoretical perspective of "new economic sociology", we describe the process of social construction behind the change of the Italian bank strategies. The process of growth of financial assets does not only depend on rational economic decisions but it is also influenced by social factors like culture, power and social networks.