What Is a Mutual Savings Bank?

Mutual savings banks first appeared in the 19th century, when they adopted a completely British model. The first mutual savings bank was incorporated in Massachusetts in 1816. By 1849, there were 87 banks operating mutual savings businesses in the United States. These banks were mainly concentrated in the northeast and urban centers of the eastern Atlantic coast. They all started as charities, and the original capital was generally donated by wealthy businessmen. The early mutual savings banks were jointly owned by depositors and mainly served the poor. The funds were mainly deposited in commercial banks, and mortgage loans are now also issued. But the common nature of ownership has strengthened the problem of principal-agent of savings banks.

Mutual savings bank

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Chinese name
Mutual savings bank
Earliest occurrence
19th century
Main business
Issue a real estate mortgage
Sources of funds
Savings deposits and time deposits
Mutual savings banks first appeared in the 19th century, when they adopted a completely British model. The first mutual savings bank was incorporated in Massachusetts in 1816. By 1849, there were 87 banks operating mutual savings businesses in the United States. These banks were mainly concentrated in the northeast and urban centers of the eastern Atlantic coast. They all started as charities, and the original capital was generally donated by wealthy businessmen. The early mutual savings banks were jointly owned by depositors and mainly served the poor. The funds were mainly deposited in commercial banks, and mortgage loans are now also issued. But the common nature of ownership has strengthened the problem of principal-agent of savings banks.
Mutual savings bank is a "mutual assistance" type financial organization without shareholders.
Washington Mutual Bank (already bankrupted in 2008 due to the subprime crisis).

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