13 June 2013

WSBI: Savings and retail banks - A stabilising force in both developed and developing countries

Savings and retail banks, because they are inherently decentralised and close to their communities, provide stability in developed and developing countries alike, and must continue to play their crucial role in financing the real economy, stated WSBI at its annual General Assembly.

Throughout the financial crisis decentralised savings banks bound to their communities continued to provide loans to all parts of the economy and avoided a credit crunch. They were able to do so because they know their customers much better than the global banks and thus could continue providing loans on a sound economic basis. Savings and retail banks are as critical to the stability of the real economy as they are to the stability of the financial system, which requires the coexistence of different banking structures that ensure stable, solid and inclusive banking markets, which proved a key element to containing the financial crisis.

WSBI President Heinrich Haasis said: “Preservation of the capacity of savings and retail banking to foster growth through financing households and SMEs is key to the health of the global economy" and retail banks’ main market focus on individuals, SMEs and local authorities is demonstrated by a majority of non-bank deposits and a large share of consumer credit, SME and mortgage credit in their portfolio. They provide access to financial services through a broad network of outlets with national or regional coverage, which allows them to act as proximity bankers and reach wide parts of the population in rural and urban areas. They demonstrate responsibility both in their business approach and towards the society in which they operate, by way of a commitment to local and regional development, helping to raise local standards of living, providing support to lower income groups, promoting the environment, and fostering growth in employment in SMEs.

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