Weathering the Storm? Financialisation and German Savings Banks

Abstract

This paper presents an amendment to and empirical application of the much-acclaimed concept of market-based banking to the case of German Sparkassen. It does this by challenging both public and scholarly opinion on savings banks as resilient spearheads of traditional banking and relationship lending. Through a close and structured comparison of two thrift institutions in the context of the entire savings banks sector during three decades it demonstrates that alternative banks should not necessarily be considered as bulwarks against financialisation, but analysed more carefully with respect to various push and pull factors, while bearing in mind the changing context in which they operate. This not only opens up new paths for further research on the relationship of structure and agency in an era of finance-led accumulation but stimulates a critical debate on the prerequisites of and perils to not-solely for-profit financial services.