This paper analyzes the legitimacy strategies of Monte di Pietà of Perugia—the first ever Italian Monte di Pietà—in its early years of activity. It represents an innovative case of the development of a financial institution, change resulting from Franciscan preaching against usury and established to aid poor people while respecting the Catholic ban on any remuneration for loaned capital. To survive, Monte di Pietà needed to request interest, introducing problems of legitimacy. Starting from Suchman's (1995) approach, the paper offers a new plausible interpretation of past events, reporting how the changes in the administrative and control systems constituted actions to successfully restore legitimacy, and shedding light on one significant piece of the history of banking in the Western world. Moreover, the study reveals the interaction among different levels of legitimacy strategies, and concludes that organizational restructuration can be used to strengthen moral justification and explanation to regain legitimacy.

You do not currently have access to this content.