A comparative analysis of the US and EU retail banking markets - Wsbi

3.2.2.2.2.2 Ownership and corporate structure
The corporate structure of commercial banks is not
uniform throughout the EU. There are some European
countries in which a bank will only be granted a
license to engage in banking if it is organised as
laid down in law. For example in Greece, Norway,
Sweden and Spain banks can only be limited liability
companies. In certain countries commercial banks
can choose from a number of different corporate
structures (as in Belgium and Austria), while in a
number of other countries there are almost no
restrictions as in Germany or France.
The vast majority of the commercial banks in Europe
that have a choice of corporate structure opt for one
that gives them the opportunity to be listed on their
respective national stock exchange, like the public
limited company in France, the company limited by
shares in Switzerland or the joint stock corporations
in Germany.
3.2.2.2.2.3 Activities
According to the universal bank principle in Europe
commercial banks can engage in the full range of
banking activities, which includes retail as well as
direct or indirect engagement in wholesale and even
investment banking. This is the standard European
model allowed since the Second Banking Coordination
Directive of 1989.
However, in some countries such as the UK banks
need a separate license if they want to be active in
investment banking. In addition, banks can own nonfinancial
companies, including insurance companies 89 .
3.2.2.2.2.4 Taxation
Commercial banks are taxed according to their
respective corporate structure under the law of the
Member State they are located in.
3.2.2.2.3 Savings banks 90
3.2.2.2.3.1 Definition and historical background
There is no common definition for a savings bank
in Europe. In addition, savings banks in Europe
possess all types of different corporate structures.
European savings banks do however share common
characteristics, such as close local and regional ties
and proximity, the will and vocation for socially
responsible behaviour and a comprehensive range of
financial services for private and corporate customers
with a special focus on small and medium-sized
enterprises.
The savings banks concept is a European idea. Its
ideological roots date back to the enlightenment.
Literature unanimously claims the first (ideological)
savings banks project to be the work of the
Frenchman Hugues Delestre, dating back to 1611.
The idea was to offer banking services to the entire
population and especially its lower-income sections
in both towns and the countryside through a large
number of establishments distributed nationwide,
thereby contributing to social justice and greater
prosperity for all.
The first savings bank was founded in 1778 in
Hamburg, Germany. Many savings banks were then
established in a number of European countries at the
beginning of the 19th century.
Initially, savings banks were usually founded by
public or private institutions, which they were
dependent on. They operated only at local and
regional level, which had the advantage of giving
them great closeness to their customers. Their core
business then was deposits.
As of the end of 2004, there were about 725
savings banks with more than 50,000 branches in
the EU-15 91 .
The market share of savings banks in their national
domestic banking markets varies: accounting for
about 37% of the total assets in Spain, 35% in
Germany 92 , 18% in Austria, 12% in France, 6% in
Italy, 5% in Greece 93 and 4% in Finland 94 .
89 See Article 51 of the Consolidated Banking Directive.
90 Sources: Perspectives 44, ESBG, and “History of European Savings Banks”, published by Wissenschaftsförderung der Sparkassenorganisation in 1996.
91 Source: ESBG.
92 This figure includes the Landesbanken, which are owned by the German savings banks.
93 Sources: Calculations based on information from ESBG Members as well as the ECB and the National Banks.
94 Source: ESBG calculation on the basis of data from the OECD publication “Bank profitability” for 2003.
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