Financial Institutions with a "Dual Bottom Line"

Project Start: 04/2016
Status: Completed
Researchers: Hans-Helmut Kotz, Reinhard H. Schmidt, Hans-Dieter Seibel, Paul Thomes
Category: Financial Intermediation
Funded by: LOEWE


The task force deals with financial institutions that have a dual mandate. On the one hand, they have to be successful in a purely financial sense and can therefore survive and prosper as institutions, and on the other hand they have a non-financial or impact-related mandate such as supporting their clients in their economic endeavors or fostering the economic and social development of a city, region or country. In almost any country "dual bottom line" institutions make up a large part of the banking system and at the same time they are largely neglected in the mainstream finance literature.

The group of "dual bottom line" financial institutions comprise, among others, public banks such as savings banks and cooperative banks in advanced countries and most development finance institutions, including microfinance institutions and small business banks, in developing and transition countries.

It is the overall objective to study these institutions and to investigate

  • how "dual bottom line" financial institutions can cope with the challenges of having more than one overarching objective
  • how they are governed and controlled and regulated
  • how they perform according to their respective mandates
  • which role they can, and do, play within the respective financial system of a country
  • and how they develop over time and in different countries and regions.

The task force consits of two sub-projects:

  1. Governance and efficiency of "dual bottom line" financial institutions in Germany
    Researchers: Hans-Helmut Kotz and Reinhard H. Schmidt
  2. Learning from history: German local banks in the 19th century and development finance institutions of today
    Researchers: Reinhard H. Schmidt, Hans-Dieter Seibel and Paul Thomes

Related Policy Publications

Author Title Published
Hans-Helmut Kotz,
Reinhard H. Schmidt
Corporate Governance of Banks – A German Alternative to the “Standard Model”
White Paper No. 45
Reinhard H. Schmidt Microfinance – Once and Today
White Paper No. 48
Reinhard H. Schmidt Passt das deutsche Dreisäulensystem in eine zunehmend harmonisierte Bankenstruktur für Europa?
Policy Letter No. 65