Before 1848, Austria had few banking institutions worthy of the name. The Austrian National Bank, created in 1816, catered to the credit needs of the government, the aristocracy, and the wealthiest segment of heavy industry. Small businesses, artisans, and rural populations generally had little access to deposit facilities or loans beyond what local moneylenders were prepared to offer. The First Austrian Savings Bank (Erste Österreichische Sparkasse) was founded in 1819, but had few immediate counterparts. Spurred on by the public press, after the Revolutions of 1848 the Habsburg government, along with major Austrian private bankers such as the Rothschilds and a few members of the high aristocracy, set up the Austrian Credit Institution for Trade and Manufacture (K.K. priv. Österreichische Credit-Anstalt für Handel und Gewerbe) in 1855. Once again, the Creditanstalt, as it was familiarly known, confined itself to serving the monied and creditworthy in Austrian society—the bank was heavily invested in the Austrian railroad system, for example—but by this time other facilities were beginning to offer similar financial services to agricultural enterprises of scale in the countryside. The Land Credit Bank (Boden-Credit-Anstalt), organized in 1863 and backed heavily with French money, was a prominent example; it took savings deposits and extended loans, though still not widely enough to satisfy the fiscal requirements of the general population. The Anglo–Österreichische Bank of 1863 also brought much-needed foreign capital into the Austrian banking market, but again largely for investment and development purposes. Nevertheless, banks like the Erste Österreichische Sparkasse, which offered people of modest means a way to put aside money relatively safely and draw interest on it, were more numerous after 1840. Seventeen were in place by the end of the decade. Their chief function was to cover local demand for mortgages and cash advances to local governments. They also quite intentionally, from the standpoint of the government, encouraged thrift and industriousness among the lower echelons of society. Upper classes made good use of these services, too. Yet another public banking convenience was the Austrian Postal Savings Bank (Österreichische Postsparkasse), established in 1883 as the first savings institution in Europe that coupled mail services with check-writing privileges. Communal savings banks were established in 1855 in part to help municipalities pay for public poor relief.
   Connections with French and British capital briefly survived the collapse of Austria–Hungary in 1918, though in neither case were the investors or their governments obligated to shore up their Vienna operations in any liquidity crisis. The British, however, were no longer positioned to serve as lenders to the world. Indeed, the end of the monarchy in 1918 and the establishment of the First Austrian Republic severely tested the viability of Austrian banks. Catastrophic inflation, the inevitable side effect of trying to pay off the country’s outstanding war debts by printing more money, left banks more dependent than ever on an inflow of hard currency from abroad. The general lack of fiscal discipline in Austria following the collapse of the Habsburg Empire in 1918 led to the creation of the Austrian Currency Bank (Österreichische Notenbank), which controlled the issuance of new legal tender, while the Austrian National Bank oversaw the Austrian foreign debt and the amount of money in circulation at any one time.
   Banks both large and small regularly folded during the First Republic from the end of World War I to the Anschluss with Nazi Germany in 1938. The pervasive economic nationalism of east central Europe made it very difficult for Viennese banks to restore connections in Czechoslovakia and elsewhere. These failures often hit what social protections Austrian society had to offer, such as foundations that supported crippled children and municipal housing projects. Those institutions that remained solvent were increasingly capitalized from Germany even before Hitler’s takeover. Major Austrian banks, such as the Creditanstalt, along with industrial concerns and utilities, were officially nationalized in 1946 to prevent their assets from falling into the hands of the occupying forces, particularly those from the Soviet Union. These firms, however, were run as profit-making financial institutions in which the state was a heavy, though not exclusive, stockholder. Coalition governments led from 2000 to 2006 by Wolfgang Schüssel of the Austrian People’s Party encouraged the privatization, already underway for about a decade, of many financial institutions. Austrian banks were merged, consolidated, and taken over by foreign competitors and investment groups with dizzying speed. At the same time, the collapse of the Soviet Union opened the way for major Austrian banks and their affiliates to gain a firm and profitable foothold in the redevelopment plans of countries in eastern and east central Europe. Although Austrian financial conglomerates and the banks that participated continued to profit handsomely from these ventures, there have been notable failures too, chiefly the Bank for Labor and Economic Development (BAWAG) investment operation.

Historical dictionary of Austria. . 2014.

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