A savings bank is a
financial institution that is not run on a profit-maximizing basis, and whose original or primary purpose is collecting deposits on
savings accounts that are invested on a low-risk basis and receive
interest. Savings banks have mostly existed as a separate category in
Europe.
Savings banks originated in late-18th Europe as a development of the
Enlightenment, and became a Europe-wide phenomenon in the first half of the 19th century.[1] The trajectories of savings bank systems then diverged across European nations, variously leading to the formation of integrated banking groups, cohesive national networks, conversion into
cooperative banking or
commercial banking entities, and/or piecemeal consolidation with other credit institutions. In most countries, the surviving savings banks have private-sector status and no longer operate under a distinctive legislative framework; significant exceptions include Germany and Luxembourg, where savings banks are public-sector entities.
Naming
In many European languages, savings banks are referred to by a word that differentiates them from banks (
French: caisse,
German: Kasse,
Italian: cassa,
Russian: касса,
Spanish: caja) and denotes their more restricted scope of activity, sometimes translated as "fund". That word has no direct equivalent in English; its etymology is identical with that of
cash and it originally referred to a
cash box, then a
cash register.
Overview
The origin of savings banks lies in liberal and philanthropic aspirations that motivated their promoters to create non-profit establishments aimed at promoting a culture of thrift and financial prudence among the lower classes, and using
savings and the logic of
compound interest as an incentive to think beyond short-term living horizons. In France, savings banks projects started to emerge in the 1750s and multiplied during the
French Revolution but with no lasting success. Liberal luminaries including
Adam Smith,
Thomas Robert Malthus and
Jean-Baptiste Say took interest in the economic and social role of savings.[1]
The oldest lasting savings bank is widely recognized to have been the Ersparungsclasse der Allgemeinen Versorgungsanstalt established in
Hamburg in 1778, followed by other endeavors in Germany and Switzerland in the late 18th century. Savings banks mushroomed in the early 19th century, with landmark establishments in
Göttingen (1801, first municipal savings bank),
Ruthwell, Scotland (1810, first in the United Kingdom),
Boston (1816, first in the United States),
Paris (1818, first in France), and
Vienna (1819, first in the Austrian Empire). Even so, origin stories of the savings bank concept were long disputed. In 1914, the New Student's Reference Work said of the origins of savings banks:[2]
France claims the credit of being the mother of savings banks, basing this claim on a savings bank said to have been established in 1765 in the town of
Brumath, but it is of record that the savings bank idea was suggested in England as early as 1697. There was a savings bank in Hamburg, Germany, in 1778 and in Berne, Switzerland, in 1787. The first English savings bank was established in 1799, and postal savings banks were started in England in 1861.
The original function of savings banks to service consumers was limited to savings, not borrowing, a foundational difference with
cooperative banking which started developing a bit later during the 19th century. Savings banks were typically heavily regulated and supervised by local or national governments, and restricted to invest only in
government debt or other instruments deemed of low financial risk. Over time, however, these distinctions have tended to erode, and over the 20th century the regulatory framework and business model of savings banks has largely converged with those of commercial banks, albeit with significant variations across jurisdictions.
After a long period of relative stability, including through two world wars and the
European banking crisis of 1931 during which they were comparatively less affected than commercial banks, the savings banks came under increasing competitive pressure during the interest rate turmoil of the 1970s and underwent significant transformation and restructuring in many jurisdictions during the last quarter of the 20th century. By the early 21st century, savings banks were most significant in Germany and Spain, and to a lesser extent in Austria.[3]: 164
Germany: while the Ersparungskasse der Allgemeinen Versorgungsanstalt, est. 1778 in
Hamburg, was a philanthropic endeavor, the dominant model for German savings banks has been sponsorship by local government, starting in
Göttingen in 1801. In the early 20th century, savings banks created regional clearing entities, later known as
Landesbanks, soon followed by the national
Deutsche Girozentrale (est. 1918). The German savings banks sector is currently operating as a group with some centralized functions but decentralized organization, the
Sparkassen-Finanzgruppe which relies on a group-wide
institutional protection scheme.
Denmark: Holsteinsborg Saving Bank was established in 1810 in
Skælskør. The Danish savings banks established a common national entity, the
Fællesbanken for Danmarks Sparekasser [
da], in 1949. Their number declined from over 500 in the 1930s to a bit above 100 by the late 1980s. In 1986-1991, Fællesbanken was dismantled and its components acquired respectively by
Hafnia Insurance,
Sydbank and
Sparekassen Bikuben, the latter a major savings bank that was eventually merged into
Danske Bank in 2000. The other major savings bank,
Sparekassen SDS [
da], merged in 1990 into what in 2000 became
Nordea. The remaining savings banks in 1993 joined other smaller Danish commercial and cooperative banks to form a single association of Local Banks, Savings Banks and Cooperative Banks in Denmark, or
Lokale Pengeinstitutter [
da].[5]
Netherlands: the first Dutch savings bank (
Dutch: Spaarbank)) was established in 1817 in
Workum; 1848 saw the creation of the
Amsterdam Municipal Savings Bank [
nl]. In 1907, the savings banks started to operate as a national network (
Dutch: Spaarbankbond). In 1979-1983 the largest Dutch savings banks merged to form
VSB Group [
nl] which in the 1990s became a founding component of
Fortis Group, itself dismantled in 2008 with the Dutch operations absorbed into
ABN AMRO. Other savings banks merged into SNS Bank (for
Dutch: Samenwerkende Nederlandse Spaarbanken,
lit.'Dutch savings banks working together'), later nationalized and renamed
De Volksbank in 2017.
France: following the
Caisse d'Épargne de Paris (est. 1818), non-profit private-sector savings banks were created in numerous French towns and cities, and started developing a national organization of their own in the 1980s and 1990s. By legislation of 1999, the
Groupe Caisse d'Épargne was converted into a
cooperative banking group, which in 2009 merged with another cooperative group,
Groupe Banque Populaire, to form
Groupe BPCE.
Austria: following the 1819 establishment of
Erste Bank in
Vienna, Austrian savings banks have developed first as philanthropic associations and later as local government-sponsored entities. The 1980s and 1990s saw multiple rounds of reform and the departure from the network of the largest savings bank, Vienna's
Zentralsparkasse, which eventually became part of
UniCredit. As a result of these changes, the
Sparkassengruppe Österreich operates largely as a single commercial banking group (and is supervised as such under
European Banking Supervision), with
Erste Group Bank as its central entity.
Slovenia: the Kranjska hranilnica (
German: Krainische Sparkasse,
lit.'
Carniola Savings Bank') was established in 1820 and remained for some time the only financial institution in what is now Slovenia.[8] The
Ljubljana Municipal Savings Bank [
sl] was established in 1889.
Finland:
Turun Säästöpankki [
fi] (
lit.'Turku Savings Bank') was established in 1822 in
Turku. The number of Finnish savings banks reached more than four hundred in the mid-20th century, but has decreased since then to only 16. Of these, 15 participate in the decentralized Savings Bank Group (
Finnish: Säästöpankkiryhmä [
fi], est. 2014) while the
Oma Säästöpankki [
fi] (based in
Seinäjoki) is run independently.
Czech Republic: the
Česká spořitelna (
German: Böhmische Sparkasse) was established in 1825 under the savings bank framework of the Austrian Empire. The savings banks in
Czechoslovakia were consolidated in 1967 into a single State Savings Bank, then split in 1969 into a Czech and a Slovak components. In the post-Communist transition, Česká spořitelna was privatized and purchased in 2000 by
Erste Group.
Spain: the cajas de ahorros developed from 1835 legislation that emulated the French template. The
2008–2014 Spanish financial crisis triggered massive restructuring and consolidation, by which many savings banks were liquidated, purchased by commercial banks, or consolidated into four savings banks groups:
CaixaBank,
IberCaja,
Kutxabank, and
Unicaja.
Hungary: the
First National Savings Bank of Pest established in 1839-1840, was converted in 1844 into a
joint-stock company. From then, Hungarian entities named "savings bank" were essentially indistinguishable from commercial banks. In 1949, the Communist authorities established the National Savings Bank (
Hungarian: Országos Takarék Pénztár), later known as
OTP Bank.
Russia: in 1842, the Imperial government established savings banks in
Saint Petersburg and
Moscow. Like all Russian banks, savings banks disappeared under
war communism in the first few years of the
Russian Revolution. They were re-established in 1922-1923 as
sberkassas (
Russian: сберегательная касса). In 1991, the Russian network of sberkassas was reorganized as
Sberbank.
Slovakia: the Pressburger Spar-Casse was established in 1842 in today's
Bratislava, followed by other savings bank foundations in what is now Slovakia throughout the 1840s. Today's
Slovenská sporiteľňa, like its Czech equivalent, results from the 1969 division of the State Savings Bank of Czechoslovakia. It was also purchased by
Erste Group in 2001.
Croatia: as in Hungary (with which Croatia was tied politically until
World War I), "savings banks" were largely undistinguishable from commercial banks until the general destruction of the Croatian banking sector following
World War II. These included the
First Croatian Savings Bank (est. 1846) and
City Savings Bank of Zagreb (est. 1913).
New Zealand: The first trustee savings bank was the New Plymouth Savings Bank (est. 1850), later branded
TSB. Savings banks as a legal category disappeared in 1987, being replaced with so-called registered banks.[9]
Chile: the Caja de Ahorros de Empleados Públicos de Chile was established in 1858 for the specific benefit of government employees.
Brazil: the Caixa Economica e Monte de Socorro (
Portuguese: Savings Bank and Mount of Piety) was established in 1861, and merged with other public institutions in 1967 to form
Caixa Econômica Federal.
Japan: the
Tokyo Savings Bank [
ja] was established in 1880. The first national savings banks legislation was enacted in 1893, and by 1906 there were 486 savings banks in the country. Despite their inspiration by foreign models, Japanese savings banks had a more commercial or even speculative orientation, which led to widespread financial fragility among them. In 1921-1922, a long-delayed regulatory tightening led to all savings banks closing or merging into ordinary banks between then and the late 1940s, after which savings banks ceased to exist in Japan as a separate category. Several of the last remaining savings banks merged in May 1945 to form Japan Savings Bank Inc. (
Japanese: 株式会社日本貯蓄銀行), which in 1948 renamed itself
Kyowa Bank [
ja] and eventually became part of
Resona Holdings as the result of successive mergers and restructurings from 1991 to 2003.
Portugal: the Caixa Económica Portuguesa (
lit.'Portuguese Savings Bank') was established as a nationwide entity in 1880, and merged in 1885 with
Caixa Geral de Depósitos.
Romania: the Casa de Depuneri și Consemnațiuni (est. 1864) was renamed Casa de Depuneri, Consemnațiuni și Economie (
lit.'Deposits, Consignments and Savings Bank') in 1880 and in 1881 established a subsidiary named the Savings Bank (
Romanian: Casa de Economie). It has remained state-owned and been branded
CEC Bank since 2008.
Panama: the Caja de Ahorro en Panamá was established in 1934 as a national public bank.
Poland: the General Savings Bank (
Polish: Powszechna Kasa Oszczędności) was established in 1950 on the basis of the former postal saving system, since then known as
PKO Bank Polski.
Peru: the Cajas Municipales de Ahorro y Crédito (
lit.'municipal savings and credit banks') are
microfinance institutions that have developed as municipally-owned public enterprises since 1982.[10]: 11
Bulgaria: the State Savings Bank (
Bulgarian: Държавна спестовна каса / DSK, est. 1951) has become
DSK Bank, eventually purchased by Hungary's
OTP Bank in 2003.
Ukraine: the State Specialized Commercial Savings Bank of Ukraine was established in 1991 from the former
Savings Bank of the USSR [
ru], and converted in 1999 into a state-owned joint-stock bank, the
State Savings Bank of Ukraine (
Ukrainian: Державний ощадний банк України), also known as Oschadbank.
^Max Seidel (1908),
"Das Sparkassenwesen", Zeitschrift für die gesamte Staatswissenschaft / Journal of Institutional and Theoretical Economics (64:1): 58–107
^Alane Moysich (1997),
"The Mutual Savings Bank Crisis"(PDF), History of the Eighties: Lessons for the Future, vol. 1, Washington DC: Federal Deposit Insurance Corporation
"Liberalisation of financial markets in New Zealand" Arthur Grimes, Institute of Policy Studies,
Victoria University of Wellington, Wellington, 1998
[1] Retrieved Feb. 11, 2006.
Brunner, A., Decressin, J. / Hardy, D. / Kudela, B. (2004): Germany’s Three-Pillar Banking System – Cross-Country Perspectives in Europe, Occasional Paper, International Monetary Fund, Washington, D.C. 2004.
Mauri, Arnaldo (1969). The Promotion of Thrift and of Savings Banks in Developing Countries, International Savings Bank Institute, Geneva.
External links
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