A coalition of social justice groups in the UK have released a study criticizing Scotland’s “too big to fail” shareholder banks, and proposing the creation of small, non-profit banks based on public banking models, including public banks in Germany and credit unions in the US.
The study points to benefits for communities, business, and the environment, noting that the current banking system, 70% of which is controlled by Lloyds and Royal Bank of Scotland (parent company of our own local Citizens Bank, and described by the report as “a pin-up for casino capitalism”) fails to support necessary funds for needed infrastructure or a transition to a low-carbon economy. “Instead, billions are channelled into property, inflating asset prices, as well as unsustainable industries such as coal mining, the manufacture of nuclear weapons, and speculation on food prices, a practice which is fuelling global malnutrition.”
The report calls on Scotland’s political parties to discuss and endorse the report, and asks the Scottish government to create a task force to meet with a broad range of stakeholders to assess needs, including legal and regulatory experts who could advise on how such banks could be created and regulated.
You can read the report here. While the focus is on Scotland, there are definite parallels between the situation there and what we’ve seen in the US, where rural and low income areas are under-served by retail banks, and even in Massachusetts, where real estate investment in “hot” markets is creating only luxury housing, where small and emerging businesses are hard-put to access credit, and where large banks are turning away some municipal clients.