From It’s A Wonderful Life, we can see the advantages of community and cooperative banking where the people, and not corporate bosses, are in charge.
Left to its own volition, the financial sector will continue to be complicit in environmental degradation unless stringent mechanisms are put in place to ensure that it complies with net-zero obligations and divests from fossil fuels.
The Bank of North Dakota has fostered a tradition of public sector banking since it was founded in 1919 – the same year incidentally that Neville Chamberlain launched the Birmingham Municipal Savings Bank, which – before it was subsumed into the TSB – and subsequent loss of mutual status, had more than sixty branches around the city.
The way forward is to channel popular support for action on climate change into an organised movement. The power of that movement—marshalled to support a left government—is our best shot at doing something meaningful while we still can.
As alarm bells sound over the advancing destruction of the environment, a variety of Green New Deal proposals have appeared in the US and Europe, along with some interesting academic debates about how to fund them.
If such an implausible appointment were ever to be made by a Labour chancellor, I would regard it as a great honour. The Bank of England stands at the pinnacle of Britain’s monetary system, which I regard as one of Britain’s great public goods.
A public bank is a government-run financial institution that takes banks’ power to create value through lending and turns that power into a public utility, lending at low interest to meet public needs.
So why do school districts, municipalities, counties and states (we’ll just refer to them as “communities” from this point on) use these big Wall Street financiers to fund their projects? It is because the costs of these projects usually exceed the ability of small local community banks to finance them.
Phil Murphy, a former banker with a double-digit lead in New Jersey’s race for governor, has made a state-owned bank a centerpiece of his platform. If he wins on November 7, the nation’s second state-owned bank in a century could follow.
That is one of the major benefits to the state of having its own bank: it can borrow very cheaply in the money markets. It can get the sort of Wall Street perks not otherwise available to governments, businesses, or individuals; and it is backstopped by the Federal Reserve system if it runs short of funds.
However, there is a much cheaper way to fund this $9 billion school debt. By borrowing from its own state-chartered, state-owned bank, the state could save over $10 billion – on a $9 billion loan.
Although it is widely assumed that governments are the source of all new money – through “printing it” – the so-called private sector is the source of most new money put into circulation.