The world of finance has changed rapidly over the past two decades: heightened competition, financial globalisation, technological innovations, regulatory changes… European savings banks, which constitute a pillar of European political economies, have had to adjust.
French and Italian savings banks have been all the more exposed to change as they formerly belonged to a very specific kind of financial system characterised by heavy state intervention and regulation; and as such state-administered credit systems have been completely dismantled during the 1980s. Savings banks in both countries faced, therefore, a dramatically altered environment to which they had to adjust in order to survive.
This research, building on a case study approach, aims at uncovering the process of change in the savings banks sector in France and Italy; and at identifying the factors of change in each country. According to the literature on comparative political economy, adjustment patterns (of firms or national economic systems) are shaped by existing institutions. Institutional specificities, which are path-dependent over time, determine the peculiar outcome of change in each country; and while convergence is the outcome of market forces, divergence reflects the operation of "rigid" national institutions. The research question addressed here concerns, therefore, both the direction of change and its causes. In other words, what explains French and Italian savings banks' apparent different trajectories in front of common pressures to adjust?
Findings show simultaneous convergence and divergence forces at play within French and Italian savings banks' adjustment processes. French savings banks have become a nationally integrated cooperative banking group, while Italian savings banks have either merged with other banks to form nationally integrated commercial banking groups, or formed alliances at the regional or local level.
On the business side, the evidence is even less linear: savings banks in both countries have demonstrated a suprising ability to innovate (at the level of products or markets), while maintaining strong positions in their traditional activities. Findings suggest, therefore, the presence of a multilayered process of change, where institutions both determine and are determined by the strategies pursued by top management.
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BUTZBACH(Olivier)(2007): Varieties within Capitalism? The Modernisation of French and Italian Savings Banks, 1980-2000. ESBG Perspectives n°54, 286 pp.