An enlightened banker

Written by  Francesco Giavazzi
Memories of Franco Cingano, a man of substance and culture.
Fear is a common and unfortunately increasing frequent reaction to the impact of globalisation: migratory flows from Africa and eastern Europe, the arrival on domestic markets of increasingly high quality goods at knock-down prices, the shrinking of distance that has brought the wealth of the west and the poverty of most of the rest of the world into brutal contact. It is not the first time that this has happened.
Today fear prompts us to respond to globalisation by trying vainly to protect ourselves.
Protection from the people and the cheap goods arriving in our countries, and protection of our businesses from competition. Duties and industrial policy - an elegant definition that in reality means state aid to business - have become common terms in discussions of the future of Europe. Once again, we are deluding ourselves into believing that the way to overcome competition from India and China is to close our markets and trust in the state and the ability of our governments to back winning projects and to finance companies that become 'European champions'. ('National' would be enough for some). France has set up a national innovation agency with a 6 billion budget.

The European Industry Commissioner Gunter Verheugen repeats that when the creation of one of these champions is afoot, Brussels needs to keep an eye on the application of the anti-trust rules. In the negotiations on the opening up of agricultural markets, France demands protection for her own farmers, without realising that if only Europe were to open its frontiers to Argentinean beef, Argentina would quite soon be in a position to reimburse the shares in which many European families have invested their savings.

Perhaps - and I hope that this is the case - these delusions will not lead, as they did in the 1920s, to the end of the democracies, but they will certainly accelerate our impoverishment.

We will not succeed in closing the frontiers, but if we were to succeed we would exclude ourselves from the opportunities offered by two billion people, Indian and Chinese in particular, who are about to climb out of poverty and who need everything, certainly many of the products and services which our businesses could offer them.
I am struck by how much more open and courageous was the Italy of the 1950s and 1960s. Yes, there were a lot of public enterprises, but not subsidised by the State ? at least until the late 1970s when the policy set in. And above all, that was a generation of brave entrepreneurs who confronted distant markets and did not merely seek protection in a number of well-protected niches from energy to telephones and motorways. At the beginning of the 1950s Italy was a poor country: the per capita income was only one third of that of the richest country, the United States. By the beginning of the 1970s we had reached 70% of the US income.
Franco Cingano was one of the best examples of that Italy.

When he was appointed managing director of the Banca Commerciale Italiana in 1967 he immediately grasped that the network of Comit offices and representations throughout the world was a key factor in our economic miracle.
In short it was an export-led 'miracle', focusing on distant markets that our entrepreneurs could never have tapped into without the help of the directors of local Comit offices in Tokyo, Moscow, or Latin America, where Comit operated via the subsidiary Sudameris.

The humanity of Cingano enabled him to understand that it was always and only a matter of men, that success depended on the quality of the individuals appointed in those distant offices; and that to ensure that the right people were in each of those distant offices, and to encourage them in distant and often difficult countries, the only method was to go out to visit them often. And so he himself was constantly on the move, despite the fact that he could hardly bear to travel to Rome and yearned to be in Padua, Ferrara, Venice and the Dolomites. Today, when we have more need than ever to maintain a presence in those distant markets, we find ourselves with provincial bankers who think that Rome is the centre of the universe because it is the location of an organisation that protects them, and that the world ends at Bordighera.

Cingano also understood - and understood fast - that the future of Italy did not lie in public enterprise, despite the fact that Comit was owned by the reconstruction institute IRI and that many of the people he admired worked for IRI, not least his great friend Bruno Visentini. He felt admiration and curiosity towards entrepreneurs, particularly the selfmade men. They were mainly people with little formal education, but with intelligence, curiosity, a love of fine things and an instinct for people of talent. In an Italy where staterun television was regarded as normal, Cingano quickly understood that Mario Formenton's idea of taking the publishing house Mondadori into the television market was a winner, and he supported him from the start. He also supported Carlo Caracciolo and Eugenio Scalfari when they decided to challenge the Corriere by founding La Repubblica.

It was not something to be taken for granted in Milan that a banker who had the owners of the Milanese newspaper among his best clients should find the courage to support a mainly Roman competitor.
To seek out people of talent, you need to be unprejudiced.
And Cingano never showed prejudice.

His familiarity with these entrepreneurs did not stop at business matters. With many of them - those I have already mentioned, plus others such as Leopoldo Pirelli, Carlo De Benedetti, and the austere Turin circle, from Gianluigi Gabetti to Agnelli, there was often a fellow- feeling, a shared pleasure in books, fine things, Italian painters of the 1950s, Michelle Morgan's French films. But his best moments remained those days spent far from Milan in the Dolomites.

Fulvio Coltorti, the director of the research department at Mediobanca, remembers a passage written by Franco Cingano: "What I like best is to walk high in the mountains, above the tree line, above 2000 metres, where you meet fewer people, following unfamiliar paths or looking for new ones, generally accompanied by a few friends. I find real serenity and rest along the routes that are now inscribed in my memory; in these mountains which carry the memories of family, human relations, and the events of my life."

(Franco Cingano, Luoghi delle nostre radici, Atlante, June 1988.)