Introduction

Historically, the banking systems of most European countries were largely similar. They were all ‘three-pillar systems’ comprising three important and largely distinct groups of banks. In this kind of system, the first pillar is that of the private banks – some large and some small, and some with and some without a branch network. The second pillar is that of a country's savings banks, consisting of local savings banks, central financial institutions and a host of other affiliated financial and non-financial institutions. Cooperative or mutual banks and their affiliated institutions constitute the third pillar. Thus almost by the definition of a three-pillar-system, savings banks and cooperative banks, the main topic of the present volume on ‘alternative banks’, have played an important role in the financial systems of almost all European countries until quite recently.

The wave of financial deregulation, liberalization and privatization in the late twentieth century has changed the role and the institutional forms of these two groups of ‘alternative banks’ in many European countries and thereby also altered the overall structure of their national banking systems. The general political tendency of the past years was to regard savings banks and cooperative banks as somewhat old-fashioned and inefficient, and to advocate and implement policies that correspond to this view.