Popular banks, party banks and the wave of the 1880s and 1890s

Eight banks for one canton

The erosion of the Banca Cantonale Ticinese's privileged position and the economic change brought by the Gotthard railway opened the way for new banks. Between 1885 and 1897 four institutions were founded in the three main towns of the canton. The Banca Popolare Ticinese opened in Bellinzona in 1885, the Banca Popolare di Lugano in 1889, the Credito Ticinese in Locarno in 1890 and the Banca Svizzera Americana, also in Locarno, in 1896 or 1897, with an agency in San Francisco. The Società Bancaria Ticinese and the Banca Agricola e Commerciale followed.¹ In 1910 the eight banks of the canton had a combined balance sheet of CHF 145.1 million.² Alongside them, the large Swiss commercial banks began to establish themselves in the canton: the Swiss Bank Corporation (Società di Banca Svizzera) opened in Chiasso in 1908, followed in 1913 by the Schweizerische Kreditanstalt (Credito Svizzero) in Lugano.³

For a canton whose population had stood at 138,638 at the census of 1900, eight banks and two branches of national banks were a large number.⁴ The economist Ernst Wetter, who surveyed the local and medium-sized banks of Switzerland in a study published in 1914, explained why this density caused problems. Ticino was largely an inhospitable mountain region with relatively little industry and trade. The many banks could not confine their activity to the canton. Since they held considerable short-term savings deposits, they had to look for business abroad, above all in Italy. In Wetter's words, some of the institutions failed to bring to this task the necessary caution and expertise, with considerable losses as the consequence.⁵ The structural problem was therefore clear to observers before the crash. Ticino's banks gathered more deposits than the local economy could absorb and lent the surplus in a market that they knew less well than they believed.

Popular banks

The two popular banks of Bellinzona and Lugano followed a model that had spread through Germany, Italy and Switzerland since the middle of the century. The popular banks (banche popolari, Volksbanken) were joint-stock or cooperative banks with a broad base of small shareholders, intended to provide credit to artisans, shopkeepers and small entrepreneurs who had no access to the large banks. In Italy, Luigi Luzzatti promoted them from the 1860s, drawing on the ideas of Hermann Schulze-Delitzsch on the social function of credit. Together with Tiziano Zalli he founded in 1864 the Banca Popolare di Lodi, the first Italian popular bank, which became the starting point for many similar institutions in Lombardy and the rest of the kingdom.⁶ In Switzerland the Schweizerische Volksbank of Bern, founded in 1869, followed the same idea on a national scale.⁷ The Ticinese popular banks borrowed the name and something of the spirit, but their capital structure differed. At the end of 1912 the Banca Popolare di Lugano had a nominal capital of CHF 4 million, of which only CHF 2 million had been paid in, and reserves of CHF 500,000.⁸ Unpaid capital was a common device of the period. It allowed shareholders to subscribe large amounts with a small payment, while the bank could call the rest in a crisis. In practice a call in a crisis often met shareholders who could not pay.

The Banca Popolare di Lugano survived the crisis of 1914 and remained an important local bank in the interwar period. Its vice-chairman, E. Rava, sat on the Bank Council of the Swiss National Bank, where his knowledge of conditions in his home canton was valued. After his death in October 1919 the seat went to Achille Gianella, the director of the Banca Svizzera Americana in Locarno.⁹ The Banca Popolare Ticinese in Bellinzona was less fortunate. When the Credito Ticinese and the Banca Cantonale Ticinese closed in January 1914, depositors ran on the Bellinzona popular bank, which could not withstand the withdrawals.¹⁰

Notes

1. Associazione Bancaria Ticinese, "Cenni storici", https://www.abti.ch/cenni-storici; Nosetti 2013 (as above) for the date of 12 November 1896. ↩
2. Associazione Bancaria Ticinese, "Cenni storici" (as above). ↩
3. Associazione Bancaria Ticinese, "Cenni storici" (as above). ↩
4. Ufficio di statistica del Cantone Ticino (Ustat), "Da un secolo. Un'introduzione al Ticino in undici censimenti", Dati, statistiche e società 2003-3, https://www3.ti.ch/DFE/DR/USTAT/allegati/articolo/1080dss_2003-3_1.pdf ("Nel 1900 il Ticino aveva 138.638 abitanti"). The same figure appears in Carlo Agliati, "Tessin (Kanton)", in HLS, version of 2012, https://hls-dhs-dss.ch/de/articles/007394/. ↩
5. Wetter, Die Lokal- und Mittelbanken der Schweiz (as above), 88–89: "Es ist klar, dass das Wirkungsfeld dieser vielen Banken nicht auf den Kanton beschränkt sein konnte, und so wurde ein 'Auslandgehen', vor allem nach Italien, zur Notwendigkeit. Hierin nun haben nicht alle Institute die nötige Vorsicht und Sachkenntnis walten lassen, und die Folge waren bedeutende Verluste." ↩
6. Paolo Pecorari and Pierluigi Ballini, "Luzzatti, Luigi", in Dizionario Biografico degli Italiani, vol. 66 (Rome 2006), https://www.treccani.it/enciclopedia/luigi-luzzatti_(Dizionario-Biografico)/ ("insieme con T. Zalli, fondò nel 1864 la Banca popolare di Lodi, prima banca popolare italiana"; "rifacendosi a H. Schulze Delitzsch, propugnava la funzione sociale del credito"). The spread of the model in Lombardy is the author's summary. ↩
7. Jan-Henning Baumann, "Banca popolare svizzera (BPS)", in DSS, version of 30 October 2012, https://hls-dhs-dss.ch/it/articles/041976/ (founded in Bern in 1869 as Volksbank). ↩
8. Wetter (as above), 88. ↩
9. Swiss National Bank, Geschäftsbericht 1919 , https://www.snb.ch/dam/jcr:3371fdc5-fad8-429b-835a-a3b1a03f99d5/annrep_1919_komplett.de.pdf: "Im Oktober starb Herr E. Rava, Vizepräsident des Verwaltungsrates der Banca Popolare di Lugano, dessen Mitarbeit im Bankrat insbesondere dank seiner Kenntnis der Verhältnisse seines Heimatkantons sehr geschätzt war"; his successor in the Bank Council was "A. Gianella", director of the Banca Svizzera-Americana in Locarno. The first name is taken from Nosetti 2013 (as above), who records that Achille Gianella, previously the bank's cashier, was its director from 1898 to 1920. ↩
10. Wetter (as above), 89. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.