Privatization, Crisis, and the Transformation of Cassa Depositi e Prestiti

This chapter explores the transformation of Cassa Depositi e Prestiti (CDP) from a small Directorate-General within the Treasury to a full-fledged National Development Bank charged with channeling credit toward small firms and Mid-Caps, financing infrastructural projects, providing patient liquidity to the Treasury and equity investment to strategic firms. After a brief historical excursus, the chapter focuses in particular on two watershed moments in the history of CDP: the privatization in 2003 and the sovereign debt crisis. Both junctures paved the way to a substantial expansion and diversification of CDP’s activities in support of the Italian economy. Italy provides an ideal vantage point to explore the relationship between NDBs and their sovereigns due to the unique mismatch between the financial strength of CDP, funded by postal savings, and the financial needs of the cash-stripped Italian sovereign, burdened by an enormous public debt.