DOCSLIB.ORG

The Japanese Postal Savings System : a State-Run Financial Monster?

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Japanese Postal Savings System : a State-Run Financial Monster? Federal Reserve Bank of Cleveland September 26, 1983 decades, sliding to 39 percent of total between government and private finan- dered because such a large source of an active and important role in financial loans outstanding in 1982from 55 per- cial institutions is escalating in such funds is outside the scope of their direct intermediation and credit allocation. By cent in 1960.On the other hand, the fields as shipbuilding and construction control. The extent to which the PSShas collecting personal savings through the ~£QnomicCommentary lending share of government-related of hotels and cement factories. reduced monetary control in Japan is PSSand then allocating them to public financial organizations has increased The government's choice to rely on not clear, however. Although the PSS institutions, the Japanesegovernment steadily. The sustained expansion of administrative control in the allocation maintains a large share of personal has structured an effective system that loans made by the Trust Fund Bureau- of resources proved to be extremely deposits and the percentage of loans functions in concert with its industrial The Japanese Postal Savings System: from 10 percent of the total in 1960to effective during the reconstruction of generated by commercial banks has and social policies. Although unsophis- A State-Run Financial Monster? the current 22.7 percent-has been in- the Japaneseeconomy because of the steadily declined, the PSSchannels the ticated in terms of free-market fluctua- strumental in lowering the banking underdeveloped condition of the capi- vast majority of its funds through tions, this system provided the needed by Laura A. Kuhn industry's share of the lending pie. tal market. Now, as the capital market government agencies. Becausethe MOF capital for postwar economic reconstruc- Since funds garnered in the PSSare matures, and as economic growth slows monitors these agencies (loan rates tion. Now, however, the financial channeled, via the Trust Fund Bureau, and corporate financial demand de- have to be approved by the MOF), the community isconcerned about the power to governmental lending institutions clines, the appropriateness of extensive overall range of monetary and credit that the PSShas amassed and the apan maintains the highest in the past two decades. With a network and hence to private industry, the more governmental influence over the flow control has not been diminished by the encroachment of government institutions personal savings rate of all the of over 22,400branches, the PSShad money post offices absorb and make of funds is being questioned. shift to postal savings-the composition in areas of private-sector finance. The major industrialized countries. In deposits of more than $330 billion in available for lending, the steeper the has merely changed. If, however, the debate centers around the issue of 1982the Japanesepersonal savings 1983:IIQ, making it the largest recipient competition isamong commercial banks. Implications for Monetary Policy PSSfollows through with plans to whether a bureaucracy is better quali- rate was about 19.3 percent of of deposits in the world.' The PSScom- The private financial sector, in effect, The PSSsets interest rates paid on its expand its own lending capacity fied to direct the flow of credit than a disposable income-almost three times petes directly with commercial banks must compete directly with an institu- own deposits independently of the (currently a personal loan of up to private market. Also debated is how that of the United States.' Many analysts for personal deposits, which make up tion whose activities are outside the monetary authorities. The usual resist- about $2,800per borrower is allowed) increased governmental intervention consider the thrift of the Japanese about 99 percent of its deposit base, market economy. Thus, the flow of funds ance of the MPT to cut interest rates on to include housing finance and edu- will affect the efficiency of a free- people to be the primary reason for compared with lessthan 40 percent for is being directed, to a significant extent, postal savings accounts when the BOJ cational loans, the credit it extends will market system. Determining the appro- that country's tremendous industrial commercial banks. An attractive savings by governmental bodies rather than by decides to lower the discount rate be outside the control of the monetary priateness of government vs. private growth and technological advancement source for Japanesehouseholds, the PSS the free market; i.e., the tremendous influences the timing of money market authorities and could weaken the financing is a problem not peculiar to after World War II. Through the postal can provide more favorable rates, growth of postal savings deposits has effects desired by the BOJ. When de- effectiveness of monetary policy. the Japanesesituation. Indeed, savings system (PSS),the Japanesegov- terms, and tax treatment than commer- created a substantial flow of credit from clines of interest rates on postal American policymakers are now raising ernment has converted personal savings cial banks. Consequently, the financial the private to the public sector, bypass- deposits lag behind those of private Conclusion similar issuesabout the development of deposits into long-term capital for community is concerned about the ing the market mechanism. A question of financial institutions, a shift of funds The Japanesegovernment has played a national industrial policy. industrial, trade, infrastructural, and unrestricted expansion of post office efficiency and equity then arisesconcern- to the PSSoften results, reducing the social development. The state-run PSS savings, which are viewed as a serious ing the appropriate allocation of funds share of funds made available through has played a vital role in channeling threat to the commercial banking in the nation's economy as a whole. private sources, particularly smaller Federal Reserve Bank of Cleveland BULK RATE assetsto the private sector and in industry. This Economic Commentary Major portions of the funds channeled banks and thrift institutions. In July 1972 Research Department U.S. Postage Paid helping to finance the huge govern- discussesJapan's postal savings system, through government financial institu- and in May 1977,for example, when P.O. Box 6387 Cleveland, OH ment deficits. its characteristics and problems, and its tions via the Treasury Investments and interest-rate declines in PSSaccounts Cleveland, OH 44101 Permit No, 385 Post office savings have mushroomed effect on the Japaneseeconomy. Loans program went into housing (26.2 lagged behind the reductions in pri- 1. For additional information on the savings percent in FY 1981), small enterprise vate-sector deposits by 15 days, the total rate, see Organization for Economic Cooperation The Japanese Financial System promotion (19.6percent), living environ- value of postal savings, as a proportion and Development, OECD Economic Outlook, In contrast to the U.S.financial ment (13.9 percent), and transportation of all fixed deposits, increased July 1983. system, the Japanesefinancial market Although the observed frugality in household and communication (10.1 percentj.? substantially. For the same reason, savings results from many factors, much can be structure is highly specialized. The These sectors often find it difficult to during July-September 1980,the explained by the rapid growth in income and by system shows extensive separation of attract capital without paying a premi- accounts of the Treasury moved into a institutional factors, such as the wage payment financial activities, a comparatively high um. Moreover, the social and economic sizable surplus, the counterpart of system, the underdeveloped condition of the degree of regulation and control of social security system, the limited availability of benefits derived from public interven- which was a record shortage of funds in consumer and housing credit, and the tax system. private financial institutions by the tion may justify the intervention itself. the money markets." See Henry C. and Mable I. Wallich, "Banking and monetary authorities, and a much more Intertwined with criticism over the The MOF and the BOJ are advocating Finance," in Hugh Patrick and Henry Rosovsky, active governmental role in financial Eds., Asia's New Giant, Brookings Institution handling of postal savings is the issue of unification of the present two-tier (Washington: 1976), pp. 249-315. the government's "crowding out" the decision making process on interest 2. The deposits of the PSS are about three times private sector by encroaching on areas rates, claiming that the effective Laura A. Kuhn, a research assistant with the those of the outstanding accounts of Banque operation of monetary policy is hin- Federal Reserve Bank of Cleveland, studied in Nationale de Paris (the world's largest bank in of private financing. Competition japan in 1982. terms of deposits) and about five times those of The views stated herein are those of the author Japan's largest bank. See Gordon F. Boreharn, 5. See "Highlight of FY1981 Budget Treasury 6. "Trends in Personal Savings and Personal and not necessarily those of the Federal Reserve "The Financial System: One Reason for Japan's Investments and loans Program," japan Financial Assets Selection," Bank of Japan, Special Address Correction Requested: Pleasesend corrected mailing label to the Federal Bank of Cleveland or of the Board of Governors Success," Canadian Banker and fCB Review, vol. Economic
Load more

Recommended publications
  • The Role of Postal Networks in Expanding Access to Financial Services
    The Role of Postal Networks in Expanding Access to Financial Services Volume II COUNTRY STUDIES Egypt Kazakhstan Namibia Romania Sri Lanka Uganda Vietnam World Bank Global Information and Communication Technologies Department & ING Advisory (2004‐2005) The Role of Postal Networks in Expanding Access to Financial Services Country Case: Egypt’s Postal Finance Services The World Bank Group Global Information and Communication Technology Postbank Advisory, ING Bank Postal Policy Author’s Note This paper discusses the role of the postal network in expanding access to financial services in Egypt. It reviews the public postal operator within the postal sector and within the broader context of the communications sector. The roles of the postal network and state and privately-owned banks are also reviewed from the perspective of the financial sector development, with particular focus on payments systems development and microfinance. This paper was prepared with desk research in 2004. Field visits were not scheduled. While this country case on Egypt can stand alone, it is an integral part of this large study of the potential of postal networks to coordinate with financial service providers in 7 countries (Egypt, Kazahkstan, Namibia, Romania, Sri Lanka, Uganda, and Vietnam) and 5 regions (Africa, Asia, Eastern Europe and Central Asia, Latin America and the Caribbean, and the Middle East and Northern Africa). Glossary of Abbreviations and Acronyms ATM automated teller machine BdC Banque du Caire CIDA Canadian International Development Agency EFT
    [Show full text]
  • TAIWAN Executive Summary
    Underwritten by CASH AND TREASURY MANAGEMENT COUNTRY REPORT TAIWAN Executive Summary Banking The Taiwanese central bank is the Central Bank of the Republic of China (CBC). Bank supervision is performed by the Financial Supervisory Commission, which is also responsible for supervising insurance companies and securities firms. Taiwan applies central bank reporting requirements. These are managed by the CBC, according to the rules set out in Article 39 of the Central Bank of China Act. Resident entities are permitted to hold convertible foreign currency bank accounts domestically and outside Taiwan. Non-resident entities are permitted to hold convertible foreign currency bank accounts within Taiwan. They may also hold domestic currency accounts, such as time deposits, demand deposits and demand savings deposits. Taiwan has 40 domestic banks, 23 credit cooperatives and 37 off-shore banking units. There is a significant foreign banking presence in Taiwan – 27 foreign banks have established branches in Taiwan. Payments Taiwan’s four main interbank payment clearing systems are CIFS, FISC, the TCH and the ACH. There is also new foreign-currency clearing and settlement platform processing USD and RMB domestic and cross-strait payments and a USD interbank settlement system operated by a domestic bank. The most important cashless payment instruments in Taiwan are electronic credit transfers and, in terms of volume, payment cards. The increased use of electronic and internet banking has led to a growth in the use of electronic credit transfers and a general decline in check volumes. Credit card payments have increased rapidly in recent years, especially in the retail sector, due to their aggressive promotion by banks.
    [Show full text]
  • The Postal Savings System and United State Savings Stamps From
    Postal and Treasury Savings Stamp Systems: The War Years Harry K. Charles, Jr., Ph.D. [email protected] Abstract The Postal and Treasury Savings Stamp Systems and their associated stamps (and collection certificates and booklets) played an integral role in our country’s history during the twentieth century, especially during both World Wars. These savings stamp systems were in existence, in one form or another, from 1911 through 1970 – about sixty years. The Postal Savings Account System was officially abolished in 1966, but the sale of savings stamps for bond purchase continued until 1970. These systems raised billions of dollars for the government while giving the saver a fair, secure return on their money. The importance of these savings stamp systems to the war efforts cannot be over emphasized. They allowed everyone in the country, rich or poor, young or old to save and contribute to the war effort. School children saved pennies and brought stamps, workers brought stamps every payday, people took their change from store purchases in stamps – every where one looked there were reminders to contribute to the war effort through the purchase of war and postal savings stamps. The stamps were a convenient method to accumulate, a little bit at a time, the necessary money to buy savings certificates. This article traces the development of the Postal and Treasury Savings Stamp systems throughout their history with emphasis on the World War I and World War II periods. 1. Introduction After nearly forty years of struggle the United States Postal Savings System was finally created in 1910 by Congress.
    [Show full text]
  • Postal Giro System ▪ History and a Bit of Economics ⚫ CBDC V Postal Giro
    Central bank digital currency is evolution, not revolution – also across borders Morten Bech Swissquote Conference 2020 on Finance and Technology, EFPL, 30 October 2020 The views in this presentation are those of the presenter and not necessarily those of the BIS Restricted Restricted 2 CBDCs are hot stuff Hyperlink BIS CBDCs: the next hype or the future of payments? Graph 1 Timing of speeches and reports on CBDC1 Google search interest over time2 Number of speeches Search interest by year, index 1 12-month moving sum of the count of central bankers’ speeches resulting from a case-insensitive search for any of the following words/phrases: CBDC; central bank digital currency; digital currency and digital money. 2 12-week moving average of worldwide search interest. The data has been normalised to the 12-week moving average peak of each series. The search was run on search terms “Bitcoin” and “Facebook Libra” and topic “Central Bank Digital Currency”. Data accessed on 16 July 2020. Sources: R Auer, G Cornelli and J Frost, "Rise of the central bank digital currencies: drivers, approaches and technologies", BIS Working Papers, no 880, August 2020. Restricted 3 Key features of a retail CBDC = target or aspiration CBDC CBDC CBDC ✓ State issued Scalable High availability 1:1 Singleness of Fast Cross currency border Ease of use Legal framework Offline Restricted 4 Game plan ⚫ A simple view of payment systems ▪ Front-end, network and back-end ⚫ Innovation and payment systems ▪ Network is key ⚫ Postal giro system ▪ History and a bit of economics ⚫ CBDC v Postal giro Restricted 5 Payment system = front-end, network and back-end Payer Payee Network Back-end Network front-end front-end Restricted 6 A simple example to fix ideas Real time gross settlement system Bank A Network Central Network Bank B bank RTGS Restricted 7 Unpacking the back-end: Gold transfers between central banks Settlement asset Transfer mechanism Central Network Network Central bank A Bank B Federal Reserve Bank of New York Settlement agent [email protected] .
    [Show full text]
  • POSTAL SAVINGS Reaching Everyone in Asia
    POSTAL SAVINGS Reaching Everyone in Asia Edited by Naoyuki Yoshino, José Ansón, and Matthias Helble ASIAN DEVELOPMENT BANK INSTITUTE Postal Savings - Reaching Everyone in Asia Edited by Naoyuki Yoshino, José Ansón, and Matthias Helble ASIAN DEVELOPMENT BANK INSTITUTE © 2018 Asian Development Bank Institute All rights reserved. First printed in 2018. ISBN: 978 4 89974 083 4 (Print) ISBN: 978 4 89974 084 1 (PDF) The views in this publication do not necessarily reflect the views and policies of the Asian Development Bank Institute (ADBI), its Advisory Council, ADB’s Board or Governors, or the governments of ADB members. ADBI does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. ADBI uses proper ADB member names and abbreviations throughout and any variation or inaccuracy, including in citations and references, should be read as referring to the correct name. By making any designation of or reference to a particular territory or geographic area, or by using the term “recognize,” “country,” or other geographical names in this publication, ADBI does not intend to make any judgments as to the legal or other status of any territory or area. Users are restricted from reselling, redistributing, or creating derivative works without the express, written consent of ADBI. ADB recognizes “China” as the People’s Republic of China. Note: In this publication, “$” refers to US dollars. Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5, Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan www.adbi.org Contents List of illustrations v List of contributors ix List of abbreviations xi Introduction 1 Naoyuki Yoshino, José Ansón, and Matthias Helble PART I: Global Overview 1.
    [Show full text]
  • Postal Savings and the Provision of Financial Services: Policy Issues and Asian Experiences in the Use of the Postal Infrastructure for Savings Mobilization
    Economic & Social Affairs ST/ESA/2001/DP.22 DESA Discussion Paper No. 22 Postal Savings and the Provision of Financial Services: Policy Issues and Asian Experiences in the Use of the Postal Infrastructure for Savings Mobilization Mark J. Scher December 2001 United Nations DESA Discussion Paper Series DESA Discussion Papers are preliminary documents circulated in a limited number of copies and posted on the DESA web site http://www.un.org/esa/papers.htm to stimulate discussion and critical comment. This paper has not been formally edited and the designations and terminology used do not imply the expression of any opinion whatsoever on the part of the United Nations Secretariat. Citations should refer to a “Discussion Paper of the United Nations Department of Economic and Social Affairs.” Mark J. Scher Acknowledgements Mark J. Scher has been coordinating a project on I am grateful for the generous and substantial support postal savings with Keio University, Tokyo, on behalf of Keio University in funding this research project of the Department of Economic and Social Affairs, through a grant from the Japanese Ministry of where he has been an Economic Affairs Officer in the Education and Culture. The paper benefited from Finance and Development Branch, Development discussions with officials and experts in many Policy Analysis Division, Department of Economic and countries and the Universal Postal Union. I also Social Affairs. The views and interpretations in this express appreciation to colleagues in DESA and the paper are those of the author and do not necessarily many interns who have assisted him in the preparation represent the views of the United Nations.
    [Show full text]
  • Report, Financial Access For
    FINANCIAL ACCESS FOR ALL Putting Banking within Reach through a Universal Account System FINANCIAL ACCESS FOR ALL: PUTTING BANKING WITHIN REACH THROUGH A UNIVERSAL ACCOUNT SYSTEM 2 Financial Access for All: Putting Banking within Reach through a Universal Account System AUTHORS | Myrto Karaflos, Bessie Bauman and Joanna Ain Acknowledgments The authors would like to thank Prosperity Now’s Doug Ryan and David Newville, who reviewed this report and provided helpful feedback. We are grateful to Sandiel Thornton on our Communications team, who designed the report and graphics. We would also like to thank our external reviewer, Aaron Klein from the Brookings Institution, for giving valuable feedback and insights on this report. Finally, we are grateful to the Yale Institute of Social and Policy Studies Director's Fellowship, which supports Yale undergraduate students conducting research on U.S. domestic policy. Bessie Bauman was a 2020 Director's Fellow. Prosperity Now Prosperity Now believes that everyone deserves a chance to prosper. Since 1979, we have helped millions of people, especially people of color and those of limited incomes, to achieve financial security, stability and, ultimately, prosperity. We offer a unique combination of practical solutions, in-depth research and proven strategies, all aimed at building wealth for those who need it most. We recognize the devastating impact of the racial wealth divide on people and our economy, and we strive to equip organizations of color and others with the capacity, tools and cultural competency
    [Show full text]
  • Banking at the Fed with Fedaccounts: the Demise of Commercial Banks?, 23 N.C
    NORTH CAROLINA BANKING INSTITUTE Volume 23 | Issue 1 Article 23 3-1-2019 Banking at the Fed with FedAccounts: The eD mise of Commercial Banks? E. Kylie Norman Follow this and additional works at: https://scholarship.law.unc.edu/ncbi Part of the Banking and Finance Law Commons Recommended Citation E. K. Norman, Banking at the Fed with FedAccounts: The Demise of Commercial Banks?, 23 N.C. Banking Inst. 451 (2019). Available at: https://scholarship.law.unc.edu/ncbi/vol23/iss1/23 This Note is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina Banking Institute by an authorized editor of Carolina Law Scholarship Repository. For more information, please contact [email protected]. BANKING AT THE FED WITH FEDACCOUNTS: THE DEMISE OF COMMERCIAL BANKS? I. INTRODUCTION Approximately 32% of the population, or 90.6 million people, do not have access to traditional banking services in America.1 Within this population the demographics vary considerably among different racial and ethnic groups.2 However, certain groups are more likely to be af- fected than others.3 For example, unbanked and underbanked consumers are more likely than fully banked consumers to have lower incomes and be younger, minority, female, unmarried, and unemployed.4 The terms unbanked and underbanked are distinct.5 Unbanked refers to consumers who have no formal relationship at a bank.6 The un- derbanked are consumers who have a formal relationship with a main- stream bank but primarily rely on alternative financial institutions for their banking or credit needs.7 Because mainstream banking excludes this segment of the popu- lation from services offered to fully banked consumers, the unbanked and underbanked are more likely to use alternative financial service provid- ers, a sector of the financial industry often referred to as “fringe 1.
    [Show full text]
  • Financial Access in a Brave New Banking World
    Financial Access in a Brave New Banking World Joe Valenti and Deirdre Heiss October 2013 WWW.AMERICANPROGRESS.ORG Financial Access in a Brave New Banking World Joe Valenti and Deirdre Heiss October 2013 Contents 1 Introduction and summary 3 Problems 2 Free checking’s disappearing act 4 High-cost payroll cards are a poor alternative 5 Shrinking bank branches Exclusions based on bad banking history 6 Progress 6 Consumers have new protections and a new regulator 7 Banks have developed new product alternatives to checking accounts Mobile technology offers alternatives to bank branches 9 Locally grown financial products 11 Recommendations and conclusion 12 About the authors 13 Endnotes Introduction and summary Basic financial services can be expensive for working families that cannot easily afford them. In June 2013, a McDonald’s employee in Pennsylvania named Natalie Gunshannon sued her local franchise over the fees on the prepaid debit card that the store used to pay its employees—a card on which employees were forced to receive their wages. These fees included $1.50 for each ATM withdrawal, $5 to withdraw cash at a bank, $1 to check the account balance at ATMs, and 75 cents to pay bills online.1 In response to the lawsuit, the franchise owner agreed to give workers the options to get paid by a paper paycheck or by direct deposit to an account of their choice, rather than the payroll card.2 Since Natalie had a free account at a local credit union, she was better off without the card. But according to the Federal Deposit Insurance Corporation, or FDIC, 17 million American adults lack a bank account, and that number is growing.3 An additional 51 million adults are considered “underbanked” by the FDIC, meaning that while they may have bank accounts, they also rely on some nonbank financial institutions such as check cashers and pawn shops.
    [Show full text]
  • The Postal Savings System in the United States As of June 30, 1935 Gq XI
    CO:i?IDi:"TIAL THE POSTAL SAVIITGS SYSTEM I IT THE UITITJHD STATES let edition - Doccnbcr 7, 1936 2nd edition - June 23, 1937 3rd edition - .Va/rust 9> 1937 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONTENTS Page Part I.~~Hemorandum on the Postal Savings System Prepared by the Board*s Staff Summary . ............... 1 Nature of Postal Savings Operations •••••*.•• 5 Growth of Postal Savings Deposits..... • •«». 8 Summary 8 Periods of Growth.* 9 Average Size of Individual Balances ..••.•«•..•.» 11 Rate of Growth of Postal Savings in Large CitD.es versus Small £.«••• ..••«. • 12 Comparison with Deposit Facilities and Time D ep os it s of B ank s.«. ..*••» ...»<>...........*«.«««.o 14 Changes in Postal Savings Deposits Compared with Deposits of Suspended Banks . 19 Rede-posit of Postal Savings Funds in Banks 24 Summary ........ 24 Amounts Redeposited in the Past . 24 Factors Involved in Acceptance by Banks of Postal Savings Redeposits . ...••• 27 Growth of Excess Reserves in Banks... 29 The Problem of Postal Savings Rates 32 Earnings and Expenses of the Postal Savings System*.... 35 Position of Postal Savings in the Bonking Structure...... - 39 Needs Originally Intended to Be Met. „ 39 Changes in the Banking Structure and in Scope of Postal Savings 40 Part II9—The Report of the American Bankers Association Scope of the Report «... 44 Conclusions or "Findings"........ 46 Interpretation of Principles Underlying System............... 46 Detailed Comment on Findings of the American Bankers Association Report. 48 Evidence on Finding #1 49 Evidence on Finding #2......... ... ••...*•.••• 52 Evidence on Finding #3 55 Evidence on Finding #4 56 Banker Opinion as Shown by American Bankers Associa- tion Questionnaire ..........«»»«««<**•»».....«•«*.
    [Show full text]
  • An Empirical History of the United States Postal Savings System
    NBER WORKING PAPER SERIES AN EMPIRICAL HISTORY OF THE UNITED STATES POSTAL SAVINGS SYSTEM Steven Sprick Schuster Matthew Jaremski Elisabeth Ruth Perlman Working Paper 25812 http://www.nber.org/papers/w25812 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 May 2019 Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.S. Census Bureau not those of the National Bureau of Economic Research. The research in this paper does not use any confidential Census Bureau data. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2019 by Steven Sprick Schuster, Matthew Jaremski, and Elisabeth Ruth Perlman. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. An Empirical History of the United States Postal Savings System Steven Sprick Schuster, Matthew Jaremski, and Elisabeth Ruth Perlman NBER Working Paper No. 25812 May 2019 JEL No. G21,H42,N22 ABSTRACT Seeking to reach the unbanked, the United States Postal Savings System provided a federally insured savings alternative to traditional banks. Using novel datasets on postal deposits, demographic characteristics, and banks, we study how and by whom the System was used. We find the program was initially used by non-farming immigrant populations for short-term saving, then as a safe haven during the Great Depression, and finally as long-term investment for the wealthy during the 1940s.
    [Show full text]
  • Postal Savings Reform in Northeast Asia Part Two: China
    COUNTRY ANALYSIS UNIT FEDERAL RESERVE BANK OF SAN FRANCISCO JULY 2008 Postal Savings Reform in Northeast Asia Part Two: China his Asia Focus is the second of a two-part series the postal savings business in China has experienced both T highlighting postal savings programs in Japan, South prolonged periods of suspended activity and a more recent Korea, and China. Part One of the series reviews the evo- surge in interest from regulators and government leaders. lution of the Japanese and South Korean postal savings Following the founding of the People’s Republic of China, programs and discusses recent reform efforts and current the People’s Bank of China (PBOC) permitted the post of- challenges. Part Two outlines the development of China’s fices to provide postal savings services starting in 1951, but postal savings program, focusing on issues of rural bank- services were halted for political reasons just two years ing access and challenges to further reform. later. Postal savings services resumed in 1986 through the China Postal Savings and Remittance Bureau (CPSRB), China’s postal savings program plays a critical role in the which was part of the State Post Bureau. government’s goal of more balanced economic develop- ment. Compared to its urban areas, China’s rural areas re- As the postal savings business grew in subsequent years, main relatively financially underdeveloped. As a result, officials began to consider ways to separate the various many of the plans for China’s postal savings program are functions of the large postal system and to provide im- centered on the need to improve access to credit and other proved oversight.
    [Show full text]