Notary Lending Networks in Northern Italy in the Eighteenth and Nineteenth Centuries

This chapter explores the credit market centered on notaries in northern Italy during the eighteenth and nineteenth centuries. Through an extensive database collecting debt and credit contracts that private citizens signed before notaries, we reconstructed the lending network where notaries played the key role of matchmakers between demand and supply of money. Thanks to massive scrutiny and longitudinal information set about their clients, notaries were able to sustain a market in which a separating equilibrium could be achieved. High-risk agents could find creditors willing to lend them capital, charging a higher interest rate, and low-risk debtors could find less costly options leveraging their reliability as debtors. The capital market thus prevented the exclusion of operators who could not offer real estate in guarantee but had good reputation and good projects. Medium- and long-term capital was mobilized to finance the more modern entrepreneurial initiatives that were fueling the local economic environment and that could not find support from the newly established casse di risparmio (savings banks).