Savings Banks: From Community‑oriented Associations to Shareholder Corporations

This chapter investigates the history of Danish savings banks in a Nordic context, aiming at answering the questions: what was the purpose of savings banks at different times? What forms of governance and ownership have been prevalent in the savings banks, and what was the role of the state? While identifying two competing organizational repertoires and narratives: savings banks as community-oriented associations working for the common good and savings banks as market-focused profit-oriented businesses, it is highlighted that there is no clear dichotomy between these two. Rather, if we see the two repertoires as a continuum, the weight has changed in favor of the latter. Furthermore, the chapter shows how the governance of savings banks has changed from an elite-based model to a governance structure based on customer democracy and later shareholders. It is emphasized that an interpretation of associative governance as more democratic than other forms of governance must be avoided. It is also demonstrated that a fruitful definition of associative governance must emphasize mutual interests, common goals, cooperation, and dialogue among diverse social actors, instead of focusing on conflict. Indeed, the history of savings banks exemplifies the Nordic countries’ often-close relationship between the state and associative institutions.