Decline and Resurgence

Many savings banks converted from mutual to joint-stock ownership during the 1980s. Facing new profit pressures from shareholders, the newly converted savings banks adopted portfolios similar to those of savings and loans. When sharply increased interest rates and the fundamental maturity mismatch between short-term deposits and long-term mortgages led to protracted difficulties in the savings and loan industry, many of these newly converted savings banks failed. Although lax supervision led to the replacement of the regulator of both savings and loans and savings banks (the Federal Home Loan Bank Board) with a completely new regulator (the Office of Thrift Supervision), savings bank deposits were insured by the FDIC and thus were not affected by the failure of the Federal Savings and Loan Insurance Corporation.

Although the popularity of savings institutions (including savings banks) waned in comparison with commercial banks following the crisis of the 1980s, savings institutions experienced a resurgence during the 1990s because of competitive loan and deposit rates, their mutual ownership structure and resulting tax advantages, and the broad array of financial services they may offer under contemporary banking law.

Bibliography

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Davis, Lance Edwin, and Peter Lester Payne. "From Benevolence to Business: The Story of Two Savings Banks." Business History Review 32 (1958): 386–406.

Olmstead, Alan L. "Investment Constraints and New York City Mutual Savings Bank Financing of Antebellum Development." Journal of Economic History 32 (1972): 811–840.

Sherman, Franklin J. Modern Story of Mutual Savings Banks: A Narrative of Their Growth and Development from the Inception to the Present Day. New York: J. J. Little and Ives, 1934.

Welfling, Weldon. Mutual Savings Banks: The Evolution of a Financial Intermediary. Cleveland, Ohio: Press of Case Western Reserve University, 1968.

White, Lawrence J. The S&L Debacle: Public Policy Lessons for Bank and Thrift Regulation. New York: Oxford University Press, 1991.

Bibliography

Cable, John Ray. The Bank of the State of Missouri. New York: Columbia University, 1923.

Hammond, Bray. Banks and Politics in America, from the Revolution to the Civil War. Princeton, N.J.: Princeton University Press, 1957.

Helderman, Leonard C. National and State Banks: A Study of Their Origins. Boston: Houghton Mifflin, 1931.

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