Public banks, multilateral banks, pension and sovereign funds, and central banks
An Institution is considered ‘public’ if guided by a public mandate, governed under public law and/or publicly-owned by state authorities or public sector entities.
Public financial institutions have $73.8 trillion in assets
Public Financial Institutions: Numbers and Assets, 2017–18
Sources: Orbis 2018; OMFIF 2017
Why are public banks usually better than private banks?
Directs finance to areas that need it
Builds the non-financial sector, by filling gaps in private funding
Promotes economic stability
Improves financial standards to support social, environmental, or human rights
Sources: Orbis 2018; OMFIF 2017
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.
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 are not-for-profit cooperatives owned and controlled by their members that have traditionally specialised in loans and savings for the less well-off.
Assets continued to grow despite the financial crisis from $1181.5 billion in 2007 to $1563.5 billion in 2011.
Costa Rica’s Popular Bank
(Banco Popular y de Desarrollo Comunal)
Assets: US $5.4 billion (2016)
Run by workers assembly made up of 290 representatives drawn from 1.2m workers/savers
Triple bottom line:
Financial returns placed on a par with serving environmental and social good.
Social and environmental mission:
Dedicates loans for renewable energy, energy-efficiency retrofitting and sustainable water systems.
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.
US state of Alaska created a citizen wealth fund from revenues of oil extraction
Pays equal annual dividend (from $1000 – $3500) to all citizens
Alaska has the lowest level of inequality in the US.
PUBLIC DOES NOT EQUAL GOOD UNLESS WE HOLD THEM DEMOCRATICALLY ACCOUNTABLE
Social wealth funds have so far been largely dependent on oil extraction although revenue could come from taxes on rich elites.
Rabobank, one of the biggest cooperative banks in Europe fined $1 billion for Libor fixing.
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
But this investment was not invested in social and environmental goals.
In the UK:
This $10.421 trillion could have been spent on:
4 years of required investments to transition away from fossil fuels
$5 dollars a day for a year given to 4.3 billion people who currently earn less than this
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