This chapter examines how administration contributes to Sparkassen's performance, accountability, and ability to survive in the too-big-to-fail world of global finance. As the preceding chapter argues, economic value and competitiveness are critical explanations for Sparkassen's resilience; they continue because they out-compete their rivals and serve the economic and social needs of their public sector owners/sponsors. But economic value alone does not account for Sparkassen's performance during the first two decades of the twenty-first century, a period that overlaps the worst banking crisis since the Great Depression. Before the financial crisis, private banks like Deutsche Bank and Lehman Brothers, regional public banks like WestLB and Sachsen LB, and even public savings banks like Spain's Cajas were competitive and added value for their customers and public and private sponsors/owners. Yet, the credit institutions which soared financially also suffered extraordinary losses, failed to recover, and, in some cases, went bankrupt. Germany's Sparkassen could have followed a similar path.

As independent universal banks, German public savings banks could have followed Landesbanken's lead and gambled on the opaque financial products that brought down the giant WestLB. Banking regulators, Sparkassen CEOs, and representatives of regional and national Sparkassen associations expressed a similar view: that if Sparkassen managers had wanted to purchase the same US mortgage-backed securities that sunk the biggest banks, the local savings banks were legally permitted to do so. One Sparkassen CEO from a small institution expressed the consensus:

Several Sparkassen CEOs interviewed for this research acknowledged feeling pressure from some of their peers and particularly their Landesbanken colleagues to invest in risky funds that promised high returns (Gubitz 2013). And indeed, several Sparkassen, particularly larger institutions like Nassauische Sparkasse in Frankfurt, not only set up failed subsidiaries in Ireland but also took a €42 million bite out of the Lehman Brothers’ apple (Kohler 2011; Donch et al. 2009; Siemens 2008).