Banking on Alternatives

We don’t need to rely on private banks to finance the sustainable and equal future we want.

Public Financial Institutions

Public banks, multilateral banks, pension and sovereign funds, and central banks

Public financial institutions have $73.8 trillion in assets

public-financial-assets

Public Financial Institutions: Numbers and Assets, 2017-18

public-institutions
Sources: Orbis 2018; OMFIF 2017

Why are public banks usually better than private banks?

hospital-icon

Directs finance to areas that need it

family-icon

Builds the non-financial sector, by filling gaps in private funding

tree-icon

Promotes economic stability

hands-icon

Improves financial standards to support social, environmental, or human rights

Cooperative Banking

European-Cooperative-Banks
  • Key Fact
  • The cooperative banking sector makes up 20% of the European banking sector, but accounted for only 7% of all the write-downs and losses during first 3 years of the global financial crisis.
France-Cooperative
  • Key Fact
  • Implemented Financial Transaction Tax, a small 0.01% tax on all foreign exchange transactions, and uses this money for renewable energy, zero-impact housing and energy conservation in India, Morocco and Mali.

Credit Unions

Credit unions are not-for-profit cooperatives owned and controlled by their members that have traditionally specialised in loans and savings for the less well-off.

credit-unions-info
  • Key Fact
  • Assets continued to grow despite the financial crisis from $1181.5 billion in 2007 to $1563.5 billion in 2011.
desjardins-info

Public Bank

CostaRica-flag

Costa Rica’s Popular Bank

(Banco Popular y de Desarrollo Comunal)

Assets: US $5.4 billion (2016)

democratic

Democratic:

Run by workers assembly made up of 290 representatives drawn from 1.2m workers/savers

triple-bottom-line

Triple bottom line:

Financial returns placed on a par with serving environmental and social good.

social-environmental

Social and environmental mission:

Dedicates loans for renewable energy, energy-efficiency retrofitting and sustainable water systems.

feminist

Feminist:

50% of the people in its decision-making bodies are women.

Social wealth funds

Citizen Wealth Funds are long-term and commonly owned investment funds, where the returns are explicitly used to benefit citizens, both past and present.

Alaska

US state of Alaska created a citizen wealth fund from revenues of oil extraction

Alaska-wealth-funds

Pays equal annual dividend (from $1000 – $3500) to all citizens

  • Key Fact
  • Alaska has the lowest level of inequality in the US.

Public does not equal good unless we hold them democratically accountable

oil-icon

Social wealth funds have so far been largely dependent on oil extraction although revenue could come from taxes on rich elites.

crimes-icon

Rabobank, one of the biggest cooperative banks in Europe fined $1 billion for Libor fixing.

dice-icon

The Coop Bank in the UK bought out by hedge funds in 2017 after mismanagement. A consumers’ union is trying to take back control.

We also need a new politics of money

Central Banks have the power to produce debt-free money

alternatives-QE

But this investment was not invested in social and environmental goals.

In the UK:

alternatives-QE-results

This $10.421 trillion could have been spent on:

solar-icon

4 years of required investments to transition away from fossil fuels

poverty-icon

$5 dollars a day for a year given to 4.3 billion people who currently earn less than this