In 1930, the Great Depression affected the Italian financial sector, seriously disrupting credit lines and making it difficult for companies to obtain loans.

The Fascist regime led by Benito Mussolini, fearing a credit crunch with subsequent mass dismissals and a wave of social unrest, started to take over the banks' stakes in large industrial companies (such as steel, weapons and chemicals).

Although IRI was not intended to carry out real nationalizations, it became the de facto owner and operator of a large number of major banks and companies.

[2] By 1939 the IRI and other government agencies “controlled over four-fifths of Italy’s shipping and shipbuilding, three-quarters of its pig iron production and almost half that of steel.”[2] Political Historian Martin Blinkhorn [es] noted that “This level of state intervention greatly surpassed that in Nazi Germany, giving Italy a public sector second only to that of Stalin’s Russia.”[3] In reality, the IRI's activity was actually limited on the one hand to providing assistance mostly financing, and the other it was reduced exclusively to accounting and administrative control, without much interference in drawing up technical and economic plans on a large scale.

Other European countries, particularly the British Labour government, saw the "IRI formula" as a positive example of state intervention in the economy, better than the simple "nationalization" because it allowed for cooperation between public and private capital.

Critical of these welfare-oriented practices was the second President of the Italian Republic, the Liberal Luigi Einaudi, who said: "A public company, if not based on economic criteria, tends to a hospice-type of charity.

IRI invested very large amounts in southern Italy, such as in the construction of Italsider [de; fr] in Taranto, Alfasud Pomigliano d'Arco and Pratola Serra in Irpinia.

The appointment of the heads of banking, financial and other major companies was decided by the presidential committee, but especially during the tenure of Petrilli, the powers were concentrated in the hands of the president and a few people close to him.

Government agencies such as the Cassa Depositi e Prestiti (a bank) and Sviluppo Italia [de; it] have been dubbed "new IRI", with some negative connotations, to indicate that their purposes and policies tend to patronage, according to critics, rather than economic criteria.

In 1997 it reached the levels of indebtedness secured by the Andreatta-Van Miert agreement, but divestitures continued and the institute had lost any function but to sell its assets and to move towards settlement.