Savings Banks

Abstract

In this chapter we move away for the first time from banks and near-banks which are operated for profit into a field in which institutions were established for the good of the ‘deserving poor’. Both savings banks and building societies, at which we look in the next chapter, were founded during the industrialisation of Britain around the turn of the eighteenth century, and they both still operate on a non-profit basis. The savings banks in Britain differ considerably from their counterparts in many other countries. In most countries savings banks play a large part in the financing of house purchase, but in Britain this is a function of the specialised savings banks called building societies; only one savings bank (the Birmingham Municipal Bank) does any mortgage business. In Britain savings banks form a special financial circuit, channelling deposits from the personal sector exclusively into the public sector.