This is considerably in excess of the circulation, £40,404,000, fixed by royal decree of 1900; but the issue of additional notes was allowed, provided they were entirely covered by a metallic reserve, whereas up to the fixed limit a 40% reserve only was necessary. These notes are of 50, 100, 500 and 1000 lire; while the state issues notes for 5, 10 and 25 lire, the currency of these at the end of October 1906 being £17,546,967; with a total guarantee of £15,636,000 held against them. They were in January 1908 equal in value to the metallic currency of gold and silver.
The price of Italian consolidated 5% (gross, 4% net, allowing for the 20% income tax) stock, which is the security most largely negotiated abroad, and used in settling differences between large financial institutions, has steadily risen during recent years. After being depressed between 1885 and 1894, the prices in Italy and abroad reached, in 1899, on the Rome Stock Exchange, the average of 100.83 and of 94.8 on the Paris Bourse. By the end of 1901 the price of Italian stock on the Paris Bourse had, however, risen to par or thereabouts. The average price of Italian 4% in 1905 was 105.29; since the conversion to 3¾% net (to be further reduced to 3½ in five more years), the price has been about 103.5. Rates of exchange, or, in other words the gold premium, favoured Italy during the years immediately following the abolition of the forced currency in 1881. In 1885, however, rates tended to rise, and though they fell in 1886 they subsequently increased to such an extent as to reach 110% at the end of August 1894. For the next four years they continued low, but rose again in 1898 and 1899. In 1900 the maximum rate was 107.32, and the minimum 105.40, but in 1901 rates fell considerably, and were at par in 1902-1909.
There are in Italy six clearing houses, namely, the ancient one at Leghorn, and those of Genoa, Milan, Rome, Florence and Turin, founded since 1882.
The number of ordinary banks, which diminished between 1889 and 1894, increased in the following years, and was 158 in 1898. At the same time the capital employed in banking decreased by nearly one-half, namely, from about £12,360,000 in 1880 to about £6,520,000 in 1898. This decrease was due to the liquidation of a number of large and small banks, amongst others the Bank of Genoa, the General Bank, and the Società di Credito Mobiliare Italiano of Rome, and the Genoa Discount Bank--establishments which alone represented £4,840,000 of paid-up capital. Ordinary credit operations are also carried on by the co-operative credit societies, of which there are some 700.