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This chapter focusses on how local savings banks invested the deposits and how they dealt with the risks connected to such activities. To a large extent, especially in the first phases of their development, the managers of savings banks had to rely on their personal and social network in order to minimize risk. In later stages, as the savings banks had built up their own financial competence, and as formal regulations regarding investments were introduced, granting credit and loans became more standardized processes and allowed the saving banks to compete with especially the commercial banks. |
