Abstract: Divergent Paths: Savings Banks and the Structure of National Banking Systems

Per H. Hansen and R. Daniel Wadhwani


The financial systems of most developed countries have experienced significant deregulation over the last three decades. Social scientists disagree about the likely impact of deregulation on international differences in the structure of banking systems. Some have suggested that increasing levels of domestic and international competition will lead to convergence in the structure and operation of these systems. Others have insisted that national differences in financial systems persist and are unlikely to disappear because of the continuing influence of state authority as well as differences in national institutions. This paper examines the impact of liberalization on the role of one specific kind of intermediary within the structure of national banking systems. We consider the role of savings banks within the national banking systems of the US, UK, Denmark, Germany, Spain, Sweden, and Norway. We find that there has been considerable divergence in the role of savings institutions among these countries over the last three decades. We explore possible political, institutional, and strategic explanations for this divergence and find that organizational and strategic capabilities, though often overlooked by social scientists, seem to play a particularly important role in explaining the competitiveness of savings banks in some countries and not others.