One of the mysteries of Germany's public savings banks is how they manage to navigate domestic and global forces that brought down similar credit institutions in other countries. Public institutions generally and public banks in particular, have been under attack since the 1980s when conservative governments passed a wave of neoliberal reforms (Brown 2015; Scherrer 2017). Public savings banks across European countries – Italy, Spain, Britain, France – disappeared, consolidated, or transformed into private entities that are mostly indistinguishable from private banks. In most cases, domestic legislation changed the banking landscape in ways that undermined public savings banks’ business model. In France, for example, a 1999 law transformed savings banks into a legal form of private cooperative banks (Polster 2005). In Italy, a series of reforms in the 1990s privatized public banks and eliminated their regional requirements (Carletti et al. 2005). And in Spain, legislation in the 1980s and 1990s led to partial privatization and the elimination of the regional principle.

In Germany, private bank leaders make little secret of their feelings toward public savings banks. It is a mixture of envy and contempt (Schulz 2010). When respondents from private banks including the Bundesverband der deutschen Banken (BdB), the trade association that represents private banks, were asked what enables Sparkassen to be successful, they offered the following list of grievances: 1) Sparkassen control the retail banking market and make it difficult for private banks to compete, “They are in every city and county. The cost of entering those markets is enormous”; 2) their public identity gives Sparkassen an unfair advantage, “They’re operating at a loss in a number of places. A private bank couldn't do that”; 3) the S-Group network enables Sparkassen to be both small and local, and large and national at the same time, “They wouldn't stand a chance on their own”; and 4) their institutional protection scheme gives Sparkassen an unfair regulatory advantage in complying with the Capital Regulatory Directive (CRD).