Abstract
The Spanish Savings Banks have theirs origins in the return of the liberals exiled who had to leave the country during the reign of Fernando VII. The new liberal doctrine came from the British legal tradition and tried to spread the spirit of the estimate and the saving as social behavior. Their establishment was through the Royal Order of 3 April of 1835, related to the Savings Banks and Piety Mount, by virtue of which it was the Piety Mount’s allowed to funding and their growth through Savings Banks.
The model was simple: to gain the lower classes saving, to pay them a modest interest and in this way, to nourish the Piety Mounts who would supply credit to the more disadvantaged investors of the society.
The importance of this function never escaped to the vision of the governments who always legislated reserving the State the possibility to use the lower classes savings for public funding. The maximum example of the public intervention was Franco´s dictatorship which wanted to flood the country with saving banks to raise money to finance the economic policy of the New State. Despite of governamental interest for the creation and expansion of the savings banks, in Castilla-La Mancha, they didn´t appear until the sixties with the exception of the Cuenca Saving Bank who was born in 1944.
The aim of this study is to unravel the reasons why the savings banks were not successful in this Spanish region until the sixties. The competition of savings banks from nearby provinces more economically active than La-Mancha, the predominance of the agricultural sector and the existence of rural credit unions that satisfied the needs of the agricultural sector, all together were the main reasons that prevented the emergence of these financial institutions. Franco´s interventionist policy failed to break this preference and it was not until the late-Franco period when a market niche appeared and favoured their creation and growth. Only when the regional economy took off, the savings banks did it too: the need to favour the access to the credit to the new urban classes of the seventies was the key for their birth and consolidation
For our work we have used the statistical series that offer us sources such as the INE, the CECA and the BBV for more than 30 years. We have described the characteristics of the regional economy since the early twentieth century. Castilla-La Mancha has been a predominantly agricultural region, with a population geographically widely dispersed , it was very punished on Franco’s arrival and it kept their financial needs satisfied with rural credit unions. The delimitation of our period is marked by the before and the after of the creation of the provincial savings banks. The final limitation in 1991 is because in June of 1992, the provincial savings banks merged into each other to became one: The Castilla-La Mancha savings bank
In this way, we have divided the analysis in two blocs related to the two periods: The before and the after of the savings banks, the second period reaches until 1991.
In the first part, we deal with historical, legislative and economic issues about Castilla-La Mancha´s provinces. We analyzed the effects of the autarchic legislation on savings banks connecting it with the provincial and regional GDP, and with the economic structure of big sectors and the employed population as well. Our statistic sources have been INE and National Income and her Distribution by Provinces (BBV)
In this way, we have been able to affirm that despite Franco dictatorship´s interest to set up savings banks into all provinces of Spain, the poorly developed Castilla-La Nueva kept her financial system uncompleted and rudimentary. The Manchega´s economy was based on extensive agriculture of cereal and the large estate, with a high proportion of agricultural workforce. In 1975, for example, the agricultural sector still employed more than 30% of the working population. It was the sector that more workforce employed and less contributed to regional economy: least than 20%.
The day laborer´s income pushed the survival limit and, without a saving capacity of the lower class, it was not need of crating new institution to manage it. Besides, since 1947, some powerful outside saving bank´s branch, such as Caja Madrid or Caja de Valencia was opened , in the neighboring manchega´s provinces, colliding with the aim to set up autochthonous savings banks up.
The agricultural credit union´s hegemony in the market and the encroachment of powerful external savings banks blocked the creation of any other institution who competed with theirs and even a policy very interventionist like Franco´s policy was able to avoid the market´s condition.
Once we have studied the first period: before the set up of saving bank, we have focused our attention in the second period: after the creation of saving bank. In this second bloc, we have stablished the same relationship between the provincial and regional GDP, the economic structure by big sectors and the employed population. But in this case, we focus our interest on analyzing the statistics from the four provincial savings banks provide for the CECA. We have analyzed the deposit and depositor´s evolution and we have connected it with the population and with what was happening in the rest of Spain. In the same way and to show the relationship between each one of the provincial savings bank and the economy of the territory where they worked, we have made the correlation coefficient of Pearson and Rango of Spearman between the customer of each one savings bank and GDP by big sectors in each province. From the analysis, we have confirmed that the evolution of liability was nearly connected with the provincial development and there was one feedback between the each one provincial saving bank´s growing and the development of the territory where they worked.
The service development and, in lesser degree, the building sector found the hole in the market what the saving bank need. The years of development together with the obligation to spend a part of assets to finance the homebuilding and the possibility to offer other services and financial products, which were forbidden for the saving bank since sixties, all together were the key to success.
The incipient economics modernization of the sixties made the service sector to start up and subsequently, the cities were blooded by workers and self-employed person who came from countryside and increased rapidly their saving power and at the same time demanded new financial services that the agricultural cooperative couldn´t supply.
The news urban classes were younger and more dynamics. They turned into the saving banks´ depositors which improved theirs financial services and extended the provision of credit and bank loan. These performances allowed them to attract small businessmen and self-employed person mostly of tertiary sector.
The closeness to 1 of Pearson´s correlation coefficient between the depositors of each saving bank and the evolution of the sectorial income in the province of their actuation, confirmed it, and this close link was even bigger in the services sector. The small businessmen and self-employed person from urban tertiary sector held a double category as customer: They were depositors and borrower becoming in this way in the principal customer´s provincial saving bank which allowed the first ones to fulfill their social function. In conclusion, we can affirm that although it exits a strong interventionist policy which want the proliferation of saving bank, if there aren´t the legal and market condition need, they will not be created. The saving bank of La Mancha appeared when the economic development raised a market niche where the private bank and the agricultural credit union weren´t able to hold. Classification-JEL: R1 Keywords: Desarrollo económico, Cajas de Ahorros, Economía agraria, Nicho de mercado, Intervención pública, Economic development, Savings banks, Agrarian economy, Market niche, Public intervention Pages: 209-234 Volume: 1 Year: 2015 File-URL: http://www.revistaestudiosregionales.com/documentos/articulos/pdf-articulo-2463.pdf File-Format: Application/pdf Handle: RePEc:rer:articu:v:1:y:2015:p:209-234