Banks partly owned by the state

Ever since the late 18th century, the cantons, cities and communes have played a central role in the develop­ment of the Swiss banking market. Early examples of state involvement include Zurich’s Interest Commission (1755), a precursor of Bank Leu, and the City of Bern Dienstenzins­kasse (1787), a pension fund for domestic servants. In addition, partly state-owned savings banks were later set up in many cantons, and these were eventually converted or incorporated into cantonal banks. Many communes also held a share of savings banks. In 1886, for example, 15 were partly owned by cantons, and another 36 by communes. Although these 51 made up only around 10% of all savings banks in 1886, they accounted for approximately 35% of all savings. Figure 6 shows this trend in deposits with a cantonal or communal guarantee between 1880 and 1908. It can be seen that the proportion of state-protected deposits was between 30% and 34%. State shareholdings and the resulting guarantees served chiefly to build trust. In the 19th century, when the banking market was still barely regulated, this was partic­ularly important in making savers feel more secure. At the same time, it made it easier to set up banks, which could initially be launched with relatively little paid-up capital that they would then increase gradually by building up reserves. Cantonal savings banks – the forerunners of today’s cantonal banks – were also able to offer credit at more favourable conditions, for instance to farmers. The role of state actors is still evident in the structure of the banking market today. In addition to the many cantonal banks, there are still a few savings banks and regional banks partly owned by communes, including Sparkasse Schwyz and Regiobank Solothurn. It is clear that as well as being early backers, the cantons, cities and communes remain important players in the Swiss banking landscape today.