Institutional Foundations of Personal Finance: Innovation in the in U.S. Savings Banks

ORCiD

0000-0002-9342-3285

Document Type

Article

Publication Title

Business History Review

ISSN

0007-6805

Volume

85

Issue

3

DOI

10.1017/S000768051100078X

First Page

499

Last Page

528

Publication Date

Fall 1-1-2011

Abstract

The system of personal finance that developed in the United States was more fragmented than comparative arrangements in most industrializing countries, where savings banks had become large, diversified financial institutions. The federalist political structure of the U.S., combined with lobbying by existing intermediaries, inhibited the establishment of a centralized public provider of financial services for households such as emerged elsewhere. Moreover, the United States did not develop strong, diversified savings institutions at the local level, due in part to regulations that stifled innovation by savings banks and in part to the risk-averse organizational culture of the banks themselves. These factors enabled the proliferation of specialized intermediaries that aggressively marketed new financial services to households and facilitated the growth of new patterns of financial behavior among ordinary Americans.

Comments

Winner of Henrietta Larson Award for best article published in BHR in 2011

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