The Political Debate About Savings Banks

There have been lively political debates about savings banks as long as this type of financial institutions has existed. The focus of these debates have been two of the characteristic features of savings banks: They have always pursued financial as well as non-financial objectives, and until a few years ago and nowadays at least in some countries they are, in a specific sense, public banks. I review the debate about savings banks in two ways. First, I briefly discuss the conventional arguments and present three new arguments for having this type of financial institution. Second, I review the political debate as it has developed on the international level, on the level of the European Union and finally in Germany. I conclude that even though the political debates of the last two decades have led to rather critical assessments of savings banks, both the current financial crisis and recent academic research suggest that this critical position needs to be revised