Although it is little known at least among economists, central banks in industrial countries became involved with industry in the past and particularly after the First World War. This was at least the case in Italy and Britain where central banks provided long-term finance to ailing firms and banks, becoming important industrial players in their countries. This article explores this episode in a comparative setting, and concludes that intervention did not stem from a grand design of policy or from anti-market ideologies. It was, rather, piecemeal and a consequence of financial austerity. It is also argued here that intervention was the outcome of the over-expansion of the heavy industries more than the consequence of the weakness of one particular financial system. Moreover, this history also seems to indicate that the direct management of ailing firms and banks proved less expensive for central banks than the continuous provision of funds to concerns whose managers were alien – and therefore unaccountable – to the central banks' bureaucracy.