savings bank

 

financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. A common form of savings bank, the mutual savings bank, was traditionally the only type that accepted savings deposits exclusively (see banking). Mutual savings banks are state-chartered institutions, owned by their depositors and managed for their mutual benefit by self-perpetuating boards of trustees. Savings deposits may also be received by a credit union or a savings and loan association. However, due to extensive deregulation in the banking industry (primarily during the 1980s), the distinction between savings banks and other financial institutions has become increasingly hazy. Federal deregulation laws in the 1980s gave savings banks the opportunity to become federally chartered institutions, to convert themselves into capital stock corporations, and to come under the supervision of the Federal Home Loan Bank Board. New lending powers, the removal of ceilings on interest rates, and takeovers of struggling small banks by larger ones have made the mutual savings bank, as it was understood until about 1980, largely obsolete.

Bibliography

See M. Mayer, The Money Bazaars: Understanding the Banking Revolution Around Us (1984); F. H. Ornstein, Savings Banking (1985).

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A savings bank is a financial institution whose primary purpose is accepting savings deposits. It may also perform some other functions.

In Europe, savings banks originated in the 19th or sometimes even the 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative, while in others, socially committed individuals created foundations to put in place the necessary infrastructure.

Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized entreprises. Apart from this retail focus, they also differ from commercial banks by their broadly decentralised distribution network, providing local and regional outreach.

• Communist Czechoslovakia: see Economy of Communist Czechoslovakia
• New Zealand: Savings banks ceased to exist in 1987 as an official type of bank, being replaced with registered banks (Grimes, 1998)
• Soviet Union: Traditionally, the Russian term sberkassa (сберкасса, сберегательная касса) is translated as "savings bank". However sberkassas were not banks in common sense. Initially they the outlets of the only Soviet State Bank, Gosbank until 1987 and Sberbank (USSR Savings Bank) afterwards.
• Spain: see Savings bank (Spain)
• United Kingdom: see Trustee savings bank
• United States: see Savings and loan association and Mutual savings bank

External links

• World Savings Bank Institute / European Savings Banks Group

Sources

• 'Liberalisation of financial markets in New Zealand' Arthur Grimes, Institute of Policy Studies, Victoria University of Wellington, Wellington, 1998 [1] Retrieved Feb. 11, 2006.
• Tiwari, Rajnish and Buse, Stephan (2006): The German Banking Sector: Competition, Consolidation and Contentment, Hamburg University of Technology (TU Hamburg-Harburg)
• 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 DC 2004.

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