2023-11-04 19:00:03
Banks and boxes of savings They are part of the list of types of credit institutions in Spain and, although the main function of all of them is common (granting credit to their clients), not all of them function equally. Therefore, it is important to learn to distinguish them and differentiate where it is best to deposit our savings or apply for a credit, a loan, a mortgage…
So that you know your options and their characteristics, we tell you the differences between banking and savings bank and what state they are currently in.
Differences between bank and savings banks
The main difference between bank and savings bank is that, in the second case, there is a social purpose that does not necessarily have to occur in the case of banking. These social obligations are legally defined: regulations that regulate banks and savings banks It is different and, therefore, so are the requirements for each to operate.
These are the two main characteristics of savings banksas opposed to banking:
Savings banks They cannot fully distribute the annual profits among the partnersso, although they operate according to the same market rules as banks, their profit motive is limited. Part of these profits (at least 50%) must be used for social purposes, which are defined each year by the entity’s board of directors. In addition, The actions of savings banks are closely linked to the territory in which they operate., usually at the regional level. In this way, savings banks would have the purpose of promoting and promoting development in these areas: education, sports, aid for entrepreneurs, research, environment…
In any case, Savings banks can offer the same services as banks: open a bank account, deposit or withdraw money, request loans or credits, contract savings products… Likewise, although they are not obliged to do so, It is common for banks to contribute to social and cultural development of the country through its foundations.
For the rest, the social structure of banking and savings bank It is slightly different: in the second case there is a body called ‘Control Commission’, which does not exist in banking, in addition to the board of directors and general assembly, both common to both types of credit institutions.
What Law regulates savings banks and banks?
The main rule that regulates savings banks today it is the Savings Banks and Banking Foundations Law. This is a rule that dates back to 2013, the result of the intense restructuring process of the financial system in Spain motivated by the 2008 crisis.
This regulation maintains the “classic values of savings banks” (social character and territorial roots), as explained in the Law itself, but the “lessons” learned after the last crisis are introduced. Among other things, the size of these entities is limited to reduce risks and their territorial framework of action is also limited, obligatorily limiting it to the autonomous community in which they operate.
Refering to law regulating banks, we find different regulations that affect banking activity from different fronts, including consumer protection. For example, there is a Law on bases for the organization of credit and bankingas well as a Law on organization, supervision and solvency of credit institutions.
We also find specific regulations regarding banking market supervision and control of credit intermediation, as well as related to the prevention of money laundering. Other key elements of the banking regulations They are the regulation of mortgage and consumer credit, the protection of mortgage debtors or the advertising regulations for banking services and products.
Banks and savings banks, are they public or private?
Las Savings banks have traditionally been privatealthough its purpose is social and its link with public service is very important.
Savings banks normally take the form of a limited liability company rather than a public limited company (as is the case with banking), largely because this corporate form fits better with the objectives of savings bankscloser to those of a foundation.
For its part, most The banks that operate in Spain are privatealthough the Bank of Spain (BdE) is a public institution that functions as a national central bank, as well as a supervisory body of the Spanish banking system and other financial intermediaries that operate in Spain.
Furthermore, in the past there were hybrid models or mixed banks, as was the case of Banco de Valencia, with both private and public capital. This is a model that has practically disappeared in our country.
How many savings banks are left in Spain?
At the moment There are only two savings banks in Spain: Caixa Ontinyent (Valencia) and Caixa Pollença (Mallorca). This is a very different scenario than before the 2008 crisis, when there were no less than 45 savings banks.
The 2008 crisis had everything to do with the almost complete disappearance of this credit institution model which, despite continuing to exist formally and having updated regulations, is a very minority.
Specifically, that economic and financial scenario brought with it a profound intervention by public powers to undertake the clean-up and restructuring of many of the existing savings banks, whose financial situation came to very seriously compromise the overall financial stability in Spain. .
The difficulties in guaranteeing the viability of certain savings banks and their structural weaknesses to autonomously reinforce their solvency also implied the nationalization of those savings banks that were in greatest solvency difficulties. Many others were bought by banks, drastically reducing the map of credit institutions in Spain.
Where is it better to save, in a bank or in a savings account?
There is the eternal doubt of What is better, a bank or a savings bank?, although this question has lost a lot of meaning due to the virtual disappearance of savings banks in Spain. However, there are some criteria that can help you choose:
If you are looking for a closer and more local treatment, you may prefer to opt for a savings bank. Of course, currently you only have two options, in Valencia and Mallorca. The law requires these entities to operate only within their autonomous community. You may not be able to open an account there if you do not reside in these areas. If your profile is more of an investor and proximity does not matter so much to you, a bank may be your best choice. Given that it is the type of credit institution par excellence in Spain, you will have access to a very broad market and a varied and competitive offer of financial products. If you care about social workKeep in mind that many banks allocate part of their profits to this type of purpose. You can choose the entity that best suits your interests or that invests the most in what you consider important for development and social improvement.
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