One important principle of the 1936 legislation was mandatory specialization. The law distinguished between commercial banks (specializing in short-term business, ., shorter than 18 months) and special credit institutions (operating in medium- and long-term busi- ness and specializing in one particular sector – agriculture, building, public works, indus- try, or the Mezzogiorno). Moreover, since 1973, banks had been subject to a “portfolio re- quirement” and a credit ceiling for loans to the private sector. The former required banks to hold a minimum amount of medium- and long-term government or government-guaran- teed bonds, while the latter was an explicit quantitative ceiling on the amount of loans to the private.
