German investors flee to Sparkasse safety
AFP/The Local · 11 Oct 2008, 09:41
Published: 11 Oct 2008 09:41 GMT+02:00
In the past two weeks alone, Germans have put more than one billion euros into accounts at the country's massive network of Sparkasse savings banks, according to a survey by the Bild newspaper on Friday.
“A while ago banks could not be international enough and the only ones that were 'modern' were those that were active on international markets,” said Michaela Roth, spokeswoman for the German Sparkasse federation DSGV.
“But now there is quite clearly a change in awareness taking place and the image of this very conservative, very solid business model is improving,” Roth told AFP.
Merkel issued the blanket deposit guarantee on Sunday in an effort to stave off panic withdrawals after Berlin cobbled together a 50-billion-euro rescue of the country's fourth biggest bank, Hypo Real Estate (HRE).
But although there have been no massive queues outside German banks, it is clear that the country's citizens are far from reassured: a survey published on Thursday said that just 55 percent of Germans feel their savings are safe.
So despite Merkel's assurances, which are not underpinned by legislation, Germans are taking no chances and are moving their money en masse to banks where they feel more confident that it won't disappear into thin air.
That place is the good old Sparkasse, the bank on every German high street owned by cities, local towns and communes, which was dismissed in recent years for the lacking financial wizardry needed by banks in the 21st century.
A spokesman for Haspa, Hamburg's savings bank and Germany's biggest, told AFP that since late September, when the financial crisis snowballed after the collapse of Lehman Brothers, customers have deposited 500 million euros in its branches.
“It is definitely a significant rise that we are registering. We are also noticing it with the numbers of actual customers ... Just in the last week we have gained 500 extra (customers),” Haspa spokesman Andre Grunert said.
Roth from the DSGV said that some of the federation's members had reported more deposits but cautioned that “this should not be interpreted as a general trend.”
However the association was noticing that people were being increasingly attracted by the Sparkassen business model - investing the deposits that individuals make in the form of loans to local small and mid-sized firms, spokeswoman Michaela Roth told AFP.
Sparkassen have long dominated high street banking in Europe's biggest economy, with more than half of Germans holding their main account at one of the country's 16,000 branches.
The German economy is also heavily dependent on them for lending, with 43 percent of all German corporate loans granted by a Sparkasse or a regional state-owned Landesbank, Roth said.
The Sparkasse in the western city of Duesseldorf has brought out a new hard-hitting advert with a picture of a bench (which in German is the same word as for bank) missing the wooden slats to sit on.
“Has your bank gone? Then just come and see us!” the ad says.