SAVINGS BANK. — It can still be defined, recalling the words of De Gerando (v. bibl.), as a public deposit, to which every individual may entrust at will the money he wishes to set aside, which accumulates for him the product at compound interest, and from which he may withdraw it in whole or in part, whenever he wishes.
But the possibility that savings banks have of increasing the deposits entrusted to them by means of compound interest presupposes on their part the full exercise of credit. They, however, are still distinguished today from ordinary banks in that the collection of savings constitutes their purpose and employing it is merely a means of reimbursing themselves for expenses and paying interest to depositors.
To give an even more precise idea of such institutions it must be added that the monetary saving they aim to attract is the typical saving of family households that socially make up the less well-off classes, formed with a view to mitigating the economic consequences of the risks of labor and also to gradually transforming itself into a complementary or exclusive part of income.
It has been rightly observed that, in a first phase, such saving depends more on the spirit of foresight than on the desire to receive an interest; only when the saving has reached a certain size does it no longer remain insensible to the lure of an income on pure capital, provided, however, that it derives from entirely safe investments. Whence it happens that the forms of investment of savings banks remain bound by this last condition to such an extent as to make, it is worth repeating, the active operations of such bodies appear the instrument of the passive operations and not vice versa, as occurs in ordinary banks.
The old and small savings banks knew only four employments: mortgage loans, at very slow repayment and low interest; loans to artisans, shopkeepers, small peasants, workers; investments in public funds; loans to municipalities for the services of charitable congregations, hospitals and schools.
Now it is clear that in these employments what is aimed at is the security rather than the liquidity of the employments themselves, the nature of which makes savings banks, "a creation of the genius of benevolence," as De Gerando affirmed, also a source of landed, proletarian and civic charity, charity in the liabilities column and charity in the assets column of the balance sheet.
And, therefore, at their origin, which occurred in the last quarter of the 18th century, savings banks were considered, by moral and religious bodies, by churchmen and by Christianly enlightened philanthropists, one of the most effective means, together with private and legal charity, to overcome the scourge of pauperism and to enable the economically most modest categories to raise themselves by their own efforts through the prudent setting aside of part of their earnings to supplement their future incomes, in moments of need, or to accumulate capital.
In the course of time, into savings banks, besides the traditional deposits, that is those of the humble, flowed deposits from the bourgeoisie, which, at first impression, seemed like deposits of parasites who came to take advantage of institutions created for the poor. The first deposits had as their purpose the formation of a nest egg, the second were nothing but working capital, paid in by merchants and farmers, who sought at one and the same time safekeeping, interest and an accounting record. Such an increase in deposits determined the advent of the large savings banks and imparted to their investments a different direction because security was no longer enough for them and liquidity also became necessary.
Is it fair to say that the large savings banks, following the evolution mentioned, have lost their primitive and substantial character? One may answer that the increase in deposits of this type of savings bank does not frustrate the purposes and reasons for the existence of the savings banks themselves, making these purposes possible "at lower cost" and indeed adding new ones to them.
This is confirmed by Italian legislation (Consolidated Text approved by Royal Decree of 25 April 1929, no. 967), which, subjecting all savings banks, small and large, to the same discipline, also obliges them to group themselves into federations for the purpose of mutual moral and financial assistance, and to establish a common guarantee fund to better ensure the confidence of depositors, for whom the formation of saving, understood in the strict sense, represents the principal intent of their recourse to these meritorious institutions, into which is infused the beneficent spirit of Christianity, which always informs true civilization.
Bibliography6 works
Giulio Tamagnini