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78-628: It has been described as "the first modern credit institution in Zagreb" and "one of the most significant financial institutions in Croatia's banking history". The First Croatian Savings Bank was created on March 4, 1846, in Zagreb, on the basis of Imperial Austrian legislation of 1844 that facilitated the establishment of savings banks. It followed precedents such as the Erste österreichische Spar-Casse in Vienna (1819) and

156-612: A "run on the Reichsmark " and a run on the banks viewed as "two independent causes". Schnabel thus similarly de-emphasized the centrality of foreign-currency aspects, and noted the absence of currency mismatch in large banks' balance sheets despite high shares of foreign deposits. Schnabel also argued that the large Berlin-based universal banks were made to feel too big to fail by the Reichsbank's liquidity policy stance, contributing to moral hazard and uncontrolled balance sheet expansion in

234-511: A 69-percent stake in Commerzbank (into which Barmer Bankverein  [ de ] was similarly merged), and a 35-percent stake in Deutsche Bank und Disconto-Gesellschaft . By contrast, the non-branch banks, Berliner Handels-Gesellschaft and Reichs-Kredit-Gesellschaft , neither requested nor received public financial assistance, although the latter was state-owned. The unraveling of

312-542: A brief period of prosperity after 1924, the savings banks again experienced stress around the banking crisis of 1931 , but had been managed cautiously enough that, unlike most commercial banks, they withstood the dislocation following the crash of Creditanstalt ; despite massive deposit withdrawals, no single savings bank failed or even suspended payments for a single day. At the end of 1937, there were 197 savings banks in Austria; almost half of their aggregate deposits were held in

390-541: A conference in London on 20-23 July. The general bank holiday was lifted after three weeks on 5 August 1931. The Hoover moratorium, which aimed to protect longer-term exposures by imposing a standstill on short-term repayments, disproportionately impacted British merchant banks involved in trade finance to German counterparts, but also triggered a collapse in the value of German bonds, many of which had been underwritten by American institutions. Political constraints linked to

468-647: A consolidating entity. The latter feature stands in contrast to Germany , where the Sparkassen are supervised individually as separate entities even though they are joined in an institutional protection scheme . Another difference is that the German Sparkassen-Finanzgruppe has no significant foreign operations, whereas Erste Group Bank AG has significant subsidiaries in Central and Eastern Europe . The first Austrian savings bank, as its name indicates,

546-698: A context of increasing competition among banks. In 2014, economists Albrecht Ritschl and Samad Sarferaz found empirical evidence "consistent with the claim of Schnabel (2004) that Germany's 1931 crisis was causally a banking crisis, whereas monetary transmission under the Gold Standard played only a limited role." The long-accepted causal link between the Creditanstalt collapse and the events in Germany has likewise been questioned in more recent historiography. Separately, recent research has demonstrated that France

624-422: A customer share in Austria around 31.2% as of December 2022. The group has a complex decentralized structure but relies critically on Erste Group Bank AG , which owns the main local savings bank in Vienna , operates central functions, owns and manages subsidiaries outside of Austria, and consolidates group accounts. The Österreichischer Sparkassenverband acts as the group's national representative body. In 2020

702-467: A decree established the office of Reichskommissar für das Bankgewerbe ( lit.   ' Imperial Commissioner for Banking ' ), for which Chancellor Heinrich Brüning appointed Friedrich Ernst  [ de ] . In 1934, this was transformed into the Aufsichtsamt für das Kreditwesen , by new comprehensive banking legislation ( German : Kreditwesengesetz of 5 December 1931). Initially

780-535: A financial statement. . On 6 June 1931, the German government announced it would be unable to pay reparations as previously planned, triggering a parliamentary crisis. On 20 June 1931, U.S. President Herbert Hoover announced a one-year "holiday" or moratorium on the payment of political debts, known as the Hoover Moratorium , which brought some relief even though it was initially opposed by France. On 22 June 1931,

858-563: A general panic as the public felt the Reichsbank was reaching the limits of its liquidity assistance capacity. The government declared a general bank holiday, starting on 14 July 1931. On 15 July 1931, the Reichsbank suspended the convertibility of the Reichsmark, effectively taking Germany out of the gold standard , and imposed capital controls . From 16 July 1931, some banking transactions were again authorized but with severe limits and restrictions, partly loosened on 20 July. Meanwhile,

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936-585: A large scale from small and mid-sized banks, for which no deposit guarantee existed, to cash, direct deposits at the Banque de France , and accounts at the de facto state-guaranteed savings banks . Several joint-stock and private banks failed as a consequence, such as Banque Oustric in October 1930 and Banque Adam  [ fr ] in November 1930, and a severe credit crunch ensued. In Austria, Creditanstalt

1014-555: A lesser extent Romania , and much less so Czechoslovakia . The large Berlin-based branch banks also made a large number of acquisitions of smaller competitors, a trend which contributed in the rapid increase of their market share from 12.6 to 23.3 percent of total assets between 1913 and 1928, and culminated in 1929 with two large-scale transactions, Commerzbank 's acquisition of Mitteldeutsche Creditbank  [ de ] and Deutsche Bank 's acquisition of Disconto-Gesellschaft . The long-standing practice of self-regulation in

1092-460: A major contributor to the global economic depression of the early 1930s. In the early decades following the crisis, it was often described as a somewhat serendipitous crisis of confidence, in which the key mechanism was the withdrawal of short-term foreign deposits or " hot money ". Joseph Schumpeter described the crisis as triggered by "vicissitudes [that] would have to be explained primarily in terms of accidents and external factors". This narrative

1170-576: A major shareholder through the Anglo-International Bank , the former Anglo-Austrian Bank which had sold its Austrian operations to Creditanstalt in 1926 in an all-shares transaction. In 1930 and early 1931, the project of an Austro-German Customs Union generated additional friction, restricting the willingness of Austria's international creditors and especially France to support the country in moments of turmoil. On 11 May 1931, Creditanstalt publicly announced that it would not be able to publish

1248-508: A mortgage bank established in 1941. Outside of Vienna, the 46 local savings banks extant as of early 2024 are, by chronological order of creation (of the oldest entity in cases of subsequent mergers): Die Zweite Sparkasse (full name Die Zweite Wiener Vereins-Sparcasse ) is a Vereinssparkasse created in 2006 by the ERSTE Foundation in Vienna. It relies on volunteer work from employees of

1326-655: A separate entity, Haftungsverbund GmbH. It overlaps, but does not coincide, with the institutional guarantee scheme, which relies on an "ex-ante fund" managed by a jointly owned entity, IPS GesbR. As an exception to the Haftungsverbund , the Allgemeine Sparkasse Oberösterreich in 2009 secured a trilateral cross-guarantee agreement with Erste Group Bank and Erste Bank Österreich. As of August 2022, Haftungsverbund GmbH's shareholders were Erste Bank Österreich (51 percent) and Erste Group Bank AG (1 percent),

1404-436: A significant expansion of their scope of business. Volunteers were replaced on savings bank boards by full-time executives, and most state regulations were phased out. At the same time, the branch network and the associated number of employees kept expanding. In order to offer all financial services, numerous subsidiaries in the insurance, leasing and investment sectors were founded. There were also two major waves of mergers, with

1482-433: A significant reduction in savings banks from 162 in 1979 to 75 in 1995. Waves of mergers reduced the total number of savings banks to 128 in 1983, and 74 in 1994. The Austrian savings banks sector underwent major structural change in the 1990s. Following new legislation in 1986, many savings banks transferred their operations to joint-stock subsidiaries, which allowed the latter to raise external equity capital. In 1990–1991,

1560-663: A state-owned bank in 1966, brands itself as the successor entity of the First Croatian Savings Bank. This bank and insurance -related article is a stub . You can help Misplaced Pages by expanding it . Erste %C3%B6sterreichische Spar-Casse The Sparkassengruppe Österreich ( lit.   ' Austrian Savings Bank Group ' ) brings together all savings banks ( German : Sparkassen ) in Austria . Tracing its origins to 1819, it serves around 4 million customers in 797 branches with more than 15,500 employees, with

1638-558: A sufficient mechanism to ensure the soundness of the banking sector, not least as German banks published balance sheet data on a monthly basis, and also confidentially reported foreign debt data to the Reichsbank . By contrast, the Bank of France only gathered balance sheet information from the largest four commercial banks ( Comptoir National d'Escompte de Paris , Crédit Industriel et Commercial , Crédit Lyonnais , and Société Générale ) before

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1716-406: A supervisory regime was first introduced in 1941. In June 1931, Reichsbank President Hans Luther assured his American counterpart George L. Harrison that "periodical publication of German banks' statement provide safe means for judging their situation which is safe despite large foreign withdrawals." In spite of the apparent abundance of data, however, German public authorities' knowledge about

1794-574: The Girozentrale der Ostmärkische Sparkassen was established as a centralizing organization for the German savings banks along similar lines to the German Girozentralen that had been created in the previous four decades. After the currency stabilization in 1952, the savings bank system underwent its most successful phase to date, with extremely high growth rates, although there were also strong government restrictions to combat inflation until

1872-462: The Grossbanken , the four largest ( Deutsche Bank , Danat-Bank , Dresdner Bank , and Commerzbank ) maintained extensive branch networks, while others (e.g. Berliner Handels-Gesellschaft and Reichs-Kredit-Gesellschaft ) had no branch network and were comparatively more active lending to other banks than to industry. There was no simple correlation between bank type and risk profiles; for example,

1950-626: The Austrian Financial Market Authority as a mandatory deposit guarantee scheme in line with Austrian and EU legislation. Under Austrian law, the Sparkassengruppe deposit guarantee scheme may be called to intervene if the other two schemes, the uniform Einlagesicherung Austria (ESA) and that of the Raiffeisen Banking Group , are depleted; conversely, the two other schemes may protect savings banks' depositors if

2028-473: The Deutsche Golddiskontbank (a Reichsbank subsidiary, 10 percent), Deutsche Bank und Disconto-Gesellschaft (10 percent), Deutsche Zentralgenossenschaftskasse , Bank für Industrie-Obligationen , Deutsche Rentenbank-Kreditanstalt , Prussian State Bank , and Dresdner Bank (6 percent each), and other Berlin-based joint-stock banks (10 percent). The Akzeptbank's early activity was mainly focused on

2106-498: The ERSTE Foundation was created and became Erste Bank's parent entity. Meanwhile, the group expanded to 12 Eastern and Southeastern European countries. Erste Group Bank was founded in 2008 to serve as holding company, fully owning Erste Bank in Austria (now known as Erste Bank Österreich  [ de ] ) and also owning the group's foreign operations. As of the end of 2022, the ERSTE Foundation controlled 24.2 percent of

2184-498: The First National Savings Bank of Pest (1839-40). Its founders included Ljudevit Gaj , Dimitrija Demeter , Antun Mažuranić , Ambroz Vranyczany  [ hr ] , Franz von Kulmer  [ de ] , and Anastas Popović  [ sr ] . The latter became the bank's first president. The shareholders were mostly merchants of Gradec , which five years later merged with its sister town of Kaptol to form

2262-891: The Landesbank der Rheinprovinz had expanded its lending to municipalities without proper risk management, whereas its peer the Mitteldeutsche Landesbank had behaved more prudently. Harbingers of crisis started to accumulate at the end of the decade. German stock prices started declining with the "Black Friday" of May 1927, and GDP growth slowed substantially in 1928 and turned negative in 1929. Industrial production started to decline from mid-1929. A cyclical credit crunch started in May 1930 and resulted in German money supply, defined as currency and bank deposits, contracting by 17 percent from June 1930 to June 1931. German policymakers displayed excessive confidence in market discipline as

2340-898: The Oktogon gallery that has become an icon of belle époque Zagreb. After the disruption of World War I , Zagreb emerged as the dominant financial center of the newly formed Kingdom of Yugoslavia , and the First Croatian Savings Bank administered 40 percent of all deposits in the city. By 1924, it had branches in Belgrade , Bjelovar , Slavonski Brod , Celje , Crikvenica , Čakovec , Daruvar , Delnice , Đakovo , Dubrovnik , Đurđevac , Ilok , Karlovac , Kraljevica , Križevci , Ljubljana , Maribor , Sremska Mitrovica , Nova Gradiška , Novi Sad , Ogulin , Osijek , Požega , Senj , Sisak , Skopje , Split , Subotica , Sušak , Sveti Ivan Zelina , Varaždin , Velika Gorica , Vinkovci , Virovitica , Vukovar , Zemun as well as Fiume . In 1928, it took over

2418-460: The Prüfungsstelle ), jointly with an external audit firm. European banking crisis of 1931 The European banking crisis of 1931 was a major episode of financial instability that peaked with the collapse of several major banks in Austria and Germany , including Creditanstalt on 11 May 1931, Landesbank der Rheinprovinz on 11 July 1931, and Danat-Bank on 13 July 1931. It triggered

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2496-479: The gold standard continued after Germany's exit in mid-July, immediately followed by Hungary . The UK abandoned gold parity on 19 September 1931, and Austria did so on 8 October 1931. France remained in the gold standard until 1936, with severe deflationary effect. Significant banks collapsed in other countries as well. In Hungary, in addition to high foreign indebtedness, several banks had significant exposures to Austrian banks and were thus directly impacted by

2574-853: The reparations negotiations; July 1930, due to governmental crisis; and September 1930, due to the Nazi Party 's strong showing in the Reichstag election . These episodes, however, were kept under control by the Reichsbank. Similarly, the collapse in August 1929 of insurer Frankfurter Allgemeine Versicherungs-AG (FAVAG) due to fraudulent management, known in Germany as the FAVAG scandal  [ de ] , turned out to be an idiosyncratic event and perceived as such by depositors. In France, an early wave of deposit flight occurred from October 1930 to February 1931, during which retail savers transferred their holdings on

2652-601: The 1970s. In 1957, the Girozentrale was restructured from its Anschluss-era legal form under public law to a joint-stock corporation, the Girozentrale der Österreichische Sparkassen AG , subsequently renamed Girozentrale und Bank der österreichische Sparkassen AG in 1965. In 1979, through the Banking Act and the Savings Banks Act, the savings banks were placed on an equal footing with other credit institutions, which meant

2730-589: The Austrian banking turmoil. In the Kingdom of Yugoslavia , a number of banks became insolvent and were liquidated, acquired or nationalized. In France, a new wave of deposit withdrawals from small and mid-sized banks occurred between July 1931 and January 1932, albeit on a slightly smaller scale than the previous one in late 1930, , and triggered the collapse of a significant bank, the Banque Nationale de Crédit which

2808-606: The German banking sector measured by total assets; large Berlin-based universal banks ( German : Grossbanken ), another 20 percent; cooperative banks , about 10 percent; private banks , about 6 percent; the rest being mainly provincial (e.g. Bayerische Vereinsbank and Hypo-Bank in Bavaria , Barmer Bankverein  [ de ] in the Ruhr , Allgemeine Deutsche Credit-Anstalt  [ de ] in Saxony ) and other joint-stock banks. Of

2886-564: The German banking sector, with the exception of local savings banks ( German : Sparkassen ), implied that this increase in leverage was not kept in check by public supervision. Even at the time, self-regulation was not obviously effective to keep risks in check: for example, Deutsche Bank was impacted by a series of scandals related to poor credit risk controls in the mid-1920s. By the late 1920s, public banks ( Staatsbanken , Landesbanken , Girozentralen , Kommunalbanken , and Sparkassen ) represented more than one-third of

2964-591: The German debt problem would only be settled in 1953 with the London Agreement on German External Debts . At its low point in 1932, German economic output had declined 39 percent from its level in 1929. The large joint-stock banks were fully reprivatized in 1937. Capital controls were kept for an extended time period. The crisis had major consequences for the development of prudential banking supervision in Germany, which had been essentially nonexistent (except for savings banks) before 1931. On 19 September 1931,

3042-660: The Reichsbank introduced restrictions to its domestic bill discounts, with the aim disincentivizing transfers of money abroad by German firms - but this had catastrophic effect by creating financial squeezes even for essentially sound firms. From mid-June, concerns arose around a loan of 48 million Reichsmark that Danat-Bank had granted to struggling textile company Nordwolle , corresponding to 40 percent of its equity. On 4 July 1931, Danat-Bank ran out of discountable bills. The Reichsbank had to discontinue its liquidity assistance on 10 July 1931, and on 13 July 1931 Danat publicly disclosed its inability to meet commitments, triggering

3120-404: The Reichsbank sponsored several mechanisms to facilitate the revival of interbank transactions. On 18 July 1931, it established a temporary Transfer Association ( German : Überweisungsverband ) to allow the system's core banks to transact among themselves without being bound by the general restrictions on payments: this started with 11 institutions, and expanded to 44 by 4 August 1931, after which

3198-478: The Reichsbank was associated with the supervisory process through a newly established Supervisory Office, but that role was transferred to the Economics Minister German : Reichswirtschaftsminister upon a legislative revision in 1939, and the Aufsichtsamt für das Kreditwesen itself was dissolved in 1944 with its duties taken over by the economics ministry. After World War II , banking supervision

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3276-486: The Sparkassengruppe scheme becomes depleted. The Austrian state may intervene if all three schemes are depleted. Because of the scheme's mandatory character and public guarantees, S-Haftungs GmbH has been classified as part of the Austrian government sector by Eurostat for national accounts purposes, despite misgivings from Sparkassengruppe representatives. The joint liability scheme ( German : Haftungsverbund , also referred to as "cross-guarantee scheme") relies on

3354-709: The United Central Bank of Sarajevo ( Serbo-Croatian : Ujedinjena centralna banka ), resulting in further branches in Banja Luka , Bihać , Brčko , Derventa , Mostar , Travnik , and Tuzla . In 1930-1931, its chairman Miroslav Kulmer  [ hr ] was vice-governor of the National Bank of the Kingdom of Yugoslavia . During the European banking crisis of 1931 , however, the bank faced massive deposit withdrawal in

3432-676: The United States which were uniquely exposed because of the structuring of German post-WWI reparations. At the Lausanne Conference of July 1932 , an agreement was outlined on a three-year suspension of German reparations, but that was rejected by the U.S. Congress in December 1932, triggering defaults by France and the UK on interallied war debts. Ultimately, losses of U.S. investors into German debt amounted to 13 to 16 percent of U.S. 1931 GDP, and

3510-490: The autumn of that year, and, at its request, was placed under moratorium by decree of 21 April 1932, a measure that was subsequently extended to other financial institutions under stress. It had to sell land holdings and reduce its lending in the following years, with detrimental macroeconomic effects in Croatia. The bank's activity continued and expanded again under the wartime Independent State of Croatia , even though it lost all connections with Serbia and its branches outside

3588-449: The bank holiday restrictions were fully lifted and the Überweisungsverband was disbanded. Then on 28 July 1931, the Akzept- und Garantiebank AG (later known as Akzeptbank ) was set up to make interbank bills acceptable as collateral by the Reichsbank through credit enhancement. Its capital of 200 million Reichsmark was subscribed (albeit at 25 percent) by the government (40 percent),

3666-401: The capital of Erste Group Bank, whose equity is publicly listed and otherwise largely dispersed. The savings banks that form the Sparkassengruppe Österreich are Vienna-based Erste Bank Österreich (an AG since 1993 ), 46 local savings banks outside of Vienna, Die Zweite Sparkasse , as well as Bausparkasse der österreichischen Sparkassen AG  [ de ] (also known as sBausparkasse),

3744-557: The city of Zagreb. Following the Austro-Hungarian Compromise of 1867 , more liberal Hungarian legislation allowed the bank to expand its range of activities and to pay dividends to individual shareholders, by which it acquired widespread appeal as a badge of South Slavic pride and self-awareness. In the late 1890s the bank commissioned a new head office complex bordering Zagreb's central Ilica thoroughfare, designed by architect Josip Vancaš and completed in 1900. It includes

3822-563: The controversies over war reparations, implying that the "appearance of prosperity" and visible public investment should be avoided, weighed negatively on key economic sectors such as the automobile market and infrastructure works. Economic historian Peter Temin concludes that Brüning "ruined the German economy — and destroyed German democracy — in the effort to show once and for all that Germany could not pay reparations." It remains debated, however, to which extent an alternative strategy of expansion would have been viable. Harold James notes that

3900-522: The country's largest savings bank, Vienna's Zentralsparkasse , acquired the state-controlled Länderbank and renamed itself Bank Austria . Also in 1991, the Girozentrale purchased a retail bank, the Österreichisches Credit-Institut  [ de ] , and renamed itself the GiroCredit Bank der Sparkassen in 1992. In 1994, Bank Austria took over control of GiroCredit, but in 1997 it absorbed Creditanstalt-Bankverein and moved decisively away from

3978-539: The exit of Germany from the gold standard on 15 July 1931, followed by the UK on 19 September 1931, and extensive losses in the U.S. financial system that contributed to the Great Depression . The causes of the crisis included a complex mix of financial, fiscal, macroeconomic, political and international imbalances that have nurtured a lively debate of historiography . Germany's banking sector shrank dramatically from 1913 to 1924 but expanded rapidly again in

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4056-496: The first one of which was born in 1853. A boom in new savings banks began in 1866, with the number increasing from 26 to 210 in 1910. The model statute of 1872 abolished the previous restriction of savings banks services to "less well-off classes" and the degressive interest rate (the interest rate fell with the level of deposits); they now became "financial institutions of a humanitarian nature" ( German : Geldanstalten humanitären Charakters ) that could do business with all classes of

4134-496: The group had total assets of €277 billion, ahead of Raiffeisen Bank International (€166 billion), UniCredit Bank Austria (€119 billion), and BAWAG Group (€53 billion), making it one of the largest Austrian banking groups. Since the entry into force of European Banking Supervision in late 2014, the entire Sparkassengruppe Österreich has been directly supervised by the European Central Bank , with Erste Group Bank AG as

4212-403: The impoverishment of the population and as instruments for the accumulation of wealth by the working classes. The Savings Bank Regulation ( German : Sparkassen-Regulativ ) of 1844 established a framework of government oversight of the savings banks, with a permissive system for Vereinssparkassen and for the newly defined category of municipal savings banks ( German : Gemeindesparkassen ),

4290-421: The joint-stock savings banks may have multiple shareholders including AVSs and foundations. The local savings bank and Vienna-based Erste Bank Österreich do not compete in retail services within each other's territorial remit, thus operating under a de facto "regional principle" ( German : Regionalprinzip ) similarly to the German Sparkassen-Finanzgruppe , even though an earlier mandatory Regionalprinzip

4368-581: The largest problem banks, namely Danat-Bank, Dresdner Bank, Landesbank der Rheinprovinz as well as Bremen 's Schröder-Bank  [ de ] , and lent to the Deutsche Girozentrale to support the network of savings banks . The Reichsbank's subsidiary Deutsche Golddiskontbank acquired equity in the ailing joint-stock banks, and consequently became the owner of a 91-percent stake in Dresdner Bank (in which Danat-Bank had been forcibly merged),

4446-536: The later 1920s, with fivefold growth of aggregate bank assets between 1924 and 1930. The banks were generally undercapitalized and overstretched following rapid balance sheet expansion in the late 1920s, with a preponderance of short-term debt, much of it foreign. Germany was the world's largest capital importer between 1924 and 1929, with U.S. banks lending massively to German counterparts and U.S. investors buying German bonds in large volumes. By mid-1928, 42 percent of deposits at joint-stock banks were foreign, and

4524-454: The legacy of the hyperinflation episode of the early 1920s implied that public borrowing and spending could not be an appropriate strategy for crisis resolution, in Germany as in other Central European Countries including Austria, Hungary, and Poland. The financial crisis sharply exacerbated the economic downturn that had started before mid-1931. The German turmoil of July 1931 generated powerful spillover impact on other countries, particularly

4602-429: The new Croatian borders. It ended the moratorium status in November 1941. Unlike most other Zagreb-based banks which fell under direct German control, it was able to retain its Croatian ownership throughout the war. Like the rest of Yugoslavia's banking sector, the First Croatian Savings Bank was liquidated and its assets taken over by the National Bank of Yugoslavia in November 1945. Privredna banka Zagreb , created as

4680-642: The other Sparkassengruppe entities. Erste Bank Österreich is wholly owned by Erste Group Bank , and in turn owns stakes in Salzburger Sparkasse (100 percent, as of end 2022), Tiroler Sparkasse (75 percent), Sparkasse Hainburg-Bruck-Neusiedl (75 percent), Sparkasse Mittersill (40 percent), Steiermärkische Sparkasse (25 percent), Kärntner Sparkasse (25 percent), Allgemeine Sparkasse Oberösterreich in Linz (19 percent), Sparkasse Voitsberg-Köflach (4 percent) as well as sBausparkasse (100 percent). It has no equity stake in

4758-415: The other local Austrian savings banks. The local savings banks in Austria are governed by private-sector law, unlike most of their German counterparts which are public-law organizations ( Anstalt des öffentlichen Rechts  [ de ] ). Since 1986, they have had the option of transferring their business operations to a subsidiary joint-stock corporation ( German : Aktiengesellschaft , AG), whereas

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4836-603: The population. Savings banks were created in other parts of the Habsburg Monarchy , such as the Laibacher Sparkasse in today's Ljubljana (est. 1820), Cassa di Risparmio di Venezia (est. 1822), Cassa di Risparmio di Milano (est. 1823), Böhmische Sparkasse (est. 1823), First National Savings Bank of Pest (est. 1840), and First Croatian Savings Bank in Zagreb (est. 1846). A first central financial institution for

4914-485: The prior entity would retain its savings bank status as a "participation-managing savings bank" ( German : Anteilsverwaltungssparkasse , AVS). From early 1999, AVSs have been allowed to convert into a foundation ( German : Stiftung ). As of early 2024, 33 local savings banks operated as AG, 13 savings banks had retained their prior status (i.e. no joint-stock entity), of which 10 Vereinssparkassen and 3 Gemeindesparkassen . Following mergers and other transactions,

4992-614: The relevant municipalities, which had been established by law in 1929 but was gradually phased out from 2003 onwards at the request of the European Commission . The Vereinssparkassen did not benefit from similar guarantees before the creation of the Haftungsverbund . In accordance with Austrian savings bank legislation, the Sparkassengruppe relies on an in-house auditor, the Sparkassen-Prüfungsverband (also known as

5070-423: The rest being held by local savings banks including those for Styria (12.7 percent), Upper Austria (8 percent), Salzburg (3.2 percent) and Carinthia (2.8 percent). In total, Erste Group controls 64 percent of Haftungsverbund GmbH directly or indirectly, and likewise with Sparkassen-Haftungs GmbH. The Haftungsverbund replaced an earlier regime of guarantee of the municipal savings banks (Gemeindesparkassen) by

5148-464: The savings banks market, selling GiroCredit to the Erste Österreichische Spar-Casse . The latter merged with GiroCredit and took the name Erste Bank der oesterreichischen Sparkassen AG , in short Erste Bank, thenceforth the savings banks' dominant financial institution. In 2001, the savings banks agreed to form a Haftungsverbund or mutual support pact, which was later designated as an institutional protection scheme (IPS) under EU law. In 2003,

5226-524: The savings banks, initially joint with cooperative banks and with main geographical focus on Bohemia , was created in 1897 in Prague , the Deutsche Kreditgenossenschaft für Böhmen . It changed its name in 1901 to Centralbank der deutschen Sparkassen  [ de ] , and relocated to Vienna in 1916. It was liquidated in 1926. The Austrian hyperinflation following World War I destroyed

5304-596: The share was 18 percent of all deposits in the German banking sector in 1929. This unusual feature of the German financial system was a direct legacy of the hyperinflation of 1921-1923 , which durably impaired the role of capital markets and made the country abnormally dependent on short-term foreign lending. Many German companies routinely parked their money in foreign subsidiaries that in turn lent to their German parent. Similar patterns could be observed in other Central European countries that had suffered from hyperinflation, particularly Austria , Hungary , and Poland , to

5382-565: The true state of banks' financial condition was systematically deficient. Conversely, the issue of foreign lending was heavily politicized in Germany and its importance correspondingly overestimated, not least because much of the "foreign capital" invested in Germany was actually round-tripping by German investors e.g. via the Netherlands and Switzerland for tax avoidance . Incipient financial instability occurred in Spring 1929, due to frictions in

5460-483: The two main Vienna savings banks, Zentralsparkasse (the Viennese Gemeindesparkassen , with 588 million schillings in total assets) and Erste Bank (the original Vereinssparkassen , with 416 million). Between 1938 and 1945 under Anschluss , the Austrian savings banks adopted some features of the German system including the creation of the Girozentrale der ostmärkischen Sparkassen . In 1939,

5538-430: The value of both the assets and liabilities of the savings banks, whose aggregate deposits shrunk from 2 billion kronen (4.3 billion schillings ) in 1913 to 3 million schillings in 1923. The disruption could only be overcome because the legislature allowed the savings banks to carry out new tasks, especially current account business and cashless payment transactions as well as foreign exchange and currency trading. After

5616-462: Was abolished by the 1979 savings bank legislation. The Zweite Sparkasse has operations in all of Austria except Vorarlberg, however. The Sparkassen-Haftungs GmbH (or S-Haftungs GmbH) operates the deposit guarantee scheme of the Sparkassengruppe, which is separate from the other Austrian deposit insurance systems. It was established in 1988 as a corporate entity, and was recognized in January 2019 by

5694-702: Was devolved in West Germany to the Länder , until a national banking supervisor was re-established in 1962 as the Bundesaufsichtsamt für das Kreditwesen  [ de ] , which again cooperated closely with the Deutsche Bundesbank . Another decree on 6 October 1931 granted legal personality to the Sparkassen and reinforced their public supervision. The financial crisis of 1931 has long been identified as

5772-557: Was echoed in reference works such as those by Karl Erich Born  [ de ] or Gerd Hardach  [ de ] , and more recently by Thomas Ferguson and Peter Temin . By contrast, historian Harold James has argued in 1984 that a domestic crisis of public finances was at the core of the German sequence, noting that domestic deposit flight predated the exodus of foreign investors in Germany by several critical weeks. Isabel Schnabel in 2004 identified it as twin crises in currency and banking markets respectively, namely

5850-411: Was not spared by the banking crisis, against a long-established view that the country had been spared. That view was distorted by the lack of accessible data beyond the country's four largest banks which were comparatively unscathed, and could only be corrected with the rediscovery of a unique collection of balance-sheet data of most French banks gathered by Crédit Lyonnais between 1901 and 1939, known as

5928-450: Was restructured in early 1932 as the Banque Nationale pour le Commerce et l'Industrie . In Spain, Banco de Cataluña  [ es ] failed on 7 July 1931 together with two subsidiaries, Banco de Reus de Descuentos y Préstamos and Banco de Tortosa  [ es ] , causing a credit contraction in the whole of Catalonia . Germany made "standstill agreements" with major creditor countries in August and September, following

6006-402: Was the Erste österreichische Spar-Casse , which opened on 4 October 1819 in Vienna . Other savings banks were founded in subsequent years on an associative basis ( German : Vereinssparkassen ) by individuals such as aristocrats, clergy, senior civil servants, or doctors and pharmacists. As a counterweight to private banks, the savings banks were intended as purpose-driven institutions against

6084-462: Was widely viewed as a pillar of financial stability given its history of market dominance and prudent management led by the Rothschild family . Its traditional strength, however, ironically became a vulnerability as the government leaned on it to absorb struggling banks, including Allgemeine Bodencreditanstalt and Union-Bank. Its governance was also disrupted by the emergence of the Bank of England as

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