{"id":2,"date":"2013-12-11T19:35:23","date_gmt":"2013-12-11T19:35:23","guid":{"rendered":"http:\/\/republicirelandbank.com\/?page_id=2"},"modified":"2022-10-10T13:54:07","modified_gmt":"2022-10-10T13:54:07","slug":"sample-page","status":"publish","type":"page","link":"https:\/\/republicirelandbank.com\/?page_id=2","title":{"rendered":"Public Banking"},"content":{"rendered":"\n

Public Banking<\/span><\/b> <\/b>\u2013 The Basics<\/b><\/span><\/p>\n\n\n\n

Banking in the Public Interest<\/i><\/b><\/span><\/p>\n\n\n\n

What is it? – Who has it? – Why we need it? – How we can get it?<\/span><\/p>\n\n\n\n

Public Banks are public welfare-oriented institutions and, instead of profit maximisation, their aim is the sustainable development of the real economy within their business territories. 40% of all Banks in the world are Public Banks mainly in prosperous & emerging countries like Germany, Brazil, Russia, India & China. The BRIC countries have grown 92% in the last decade compared with 15% for the west. The West is now in decline while the BRICs continue to prosper. Less than 10% of all loans granted by our current banking system are given to businesses.<\/p>\n\n\n\n

There are basically four models:<\/b><\/span> The German Savings Bank model, the Co-op model, the Japan Post Bank model & the Bank of North Dakota model.<\/p>\n\n\n\n

The German Savings Banks<\/span><\/b><\/span> Founded 1778, have 42% of the total German market and provide 42.7 per cent of all finance to German businesses.<\/p>\n\n\n\n

The German Public Savings Banks are<\/p>\n\n\n\n

1.       Operated on commercial principles with the aim of maximising sustainable lending and not on maximising profits.<\/p>\n\n\n\n

2.       Operated on the Principle of \u201cLocal deposits into local loans\u201d keeping capital in their own area.<\/p>\n\n\n\n

3.       Surpluses remain with the Bank & within the region: Profits are used to increase equity and for non-profit purposes (the public benefit principle).<\/p>\n\n\n\n

4.       Banned from engaging in financial speculation.<\/p>\n\n\n\n

5.       Only allowed to lend only to local people and businesses in its designated catchment area.<\/p>\n\n\n\n

6.       Controlled by stakeholders from the local community.<\/p>\n\n\n\n

7.       Independent of political influence and control.<\/p>\n\n\n\n

8.       The Joint Liability Scheme provides protection for all Savings Bank Branches.<\/p>\n\n\n\n

In the current recession between 2008 & 2011 German Public Banks increased lending to Small & Medium Size Enterprises (SME\u2019s) by 17%.<\/p>\n\n\n\n

Co-op Banks<\/span><\/b><\/span> Founded 1840<\/b><\/p>\n\n\n\n

“Volksbank” (German for “people’s bank”). There are Volksbank networks in at least ten countries. Germany has c. 1,000 independent local Volksbanken with 13k branches making up 26% of the German banking market.<\/p>\n\n\n\n

Japan Post Bank<\/span><\/b> – <\/b><\/span>Postal savings was introduced to Japan in 1875<\/b><\/p>\n\n\n\n

Japan Post Bank (JPB), now the largest depository bank in the world. Not only is it a convenient place for Japanese citizens to save their money, but the government has succeeded in drawing on JPB’s massive deposit base to fund a major portion of the federal budget. Rather than using its deposits to back commercial loans as most banks do, Japan Post invests them in government securities. That means the government is borrowing from its own bank and its own people rather than from foreign bondholders. The Japanese government can borrow 10-year money at 1 percent and lend it to the U.S. at 1.6 percent (the going rate on U.S. 10-year bonds), making a tidy spread.<\/p>\n\n\n\n

Although theoretically privatized in 2007, it has been a political football, and 100 percent of its stock is still owned by the government. To keep the system stable and sustainable, the money just needs to come from the nation’s own government and its own people, and needs to return to the government and people. Ellen Browne<\/i><\/p>\n\n\n\n

The Bank of North Dakota<\/span><\/b><\/span> Established 1919.<\/p>\n\n\n\n

The BND is similar to a Public Central Bank i.e. creates its own credit. It is a depository for all state tax collections and fees. It pays a competitive rate to the state treasurer. It plows those deposits back into the state of North Dakota in the form of loans. It invests back into the state in economic development type of activities.<\/p>\n\n\n\n

—–<\/p>\n\n\n\n

What make these types of Public Savings\/Lending Institution so successful?<\/b><\/span><\/p>\n\n\n\n

 In all cases the profit & the interest on lending is returned to the institution to boost its capital & returned to the community in new loans. This amount of interest can be from a few percent on short term loans to as much as 150% in the case of mortgages. All this is returned to the institution & the community. Under our current system the Interest and profit is taken out of the community & economy. This lack of adequate currency in the economy causes a slow down or a recession.<\/p>\n\n\n\n

These Public Institutions also benefit the economy by the type of loan they offer i.e. loans that support SME\u2019s. This is the type of loan that Big Banks will not offer as they do not know their customers and tend to only lend where there is an asset involved they can repossess and sell off if there is a problem with repayment.<\/p>\n\n\n\n

This type of lending over the long term does not support the economy or those who create jobs. It just fuel Boom-Bust cycles as was the case with our property bubble.<\/p>\n\n\n\n

—–<\/p>\n\n\n\n

If we refuse to allow our government to make money through public enterprises, we will be destined to bear the burden of supporting government with our taxes<\/b>,<\/b> while we watch countries such as China, Korea and Japan, which do allow public industries, enjoy the fruits of that efficient people-serving arrangement. Ellen Browne<\/i><\/i><\/p>\n\n\n\n

 <\/i><\/p>\n\n\n\n

How we can get it?<\/b><\/span><\/i><\/b><\/p>\n\n\n\n

The German Savings Banks, The Sparkassen offer their system.<\/i><\/p>\n\n\n\n

Public Savings Banks can be formed as Co-ops or Foundations.<\/i><\/p>\n\n\n\n

A huge opportunity exists for our Credit Unions and the Post Offices to becoming a major part of a comprehensive Public Savings Banking Service. <\/i><\/p>\n\n\n\n

The 99.2% State owned PTSB is about to be split into a Good & Bad bank and sold off. Why not retain the Good bank and convert its network of 70 odd branches to Public Banks. This alone would be a major start.<\/i><\/p>\n\n\n\n

What are the consequences of not putting a Public Banking system in place?<\/b><\/p>\n\n\n\n

A public banking system can be put in place at a minimal cost while the cost through Bail-outs or Bail-ins of getting our current banks back to their original state of \u201cnot serving the real economy<\/span><\/b>\u201d could be as much as 50bn? 100bn? Who knows? \u201cIreland Exits Troika Bailout To Prepare For Bail-ins\u201d Reggie Middleton. Michael Noonan passed the Bail-in process into EU law during our EU Presidency.<\/i><\/p>\n\n\n\n

Banking in the Public Interest<\/i><\/b><\/span><\/p>\n\n\n\n

—————–<\/p>\n\n\n\n

—————–<\/p>\n\n\n\n

<\/i>Professor<\/strong> <\/i>Richard Werner<\/strong><\/a><\/p>\n\n\n\n

BSc (Econ), D.Phil. (Oxon) University of Southampton.
Chair in International Banking , Director, Director of Int’l Development
Prof Werner has been at the University of Southampton since 2004. He is Director of International Development and founding Director of the Centre for Banking, Finance and Sustainable Development. Richard is also a member of the Southampton Management School’s Executive Board, as well as its Advisory Board.<\/p>\n\n\n\n

\nhttps:\/\/youtube.com\/watch?v=8pShecMoY7w\n<\/div><\/figure>\n\n\n\n
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Councils should “bring local banks into being” so they can become “powerful partners” and promote economic, social and environmental benefits to their communities. <\/strong><\/h2>\n

Alex Templeton<\/strong> Speaking at the 2nd European Conference on Banking and the Economy (ECOBATE) in Winchester, Alex Templeton, Director of the Farm Energy Project, explains how a disfunctional financial system has made it harder to lend to small businesses which in turn impacts communities.<\/p>\n

Published on Mar 21, 2013<\/strong><\/p>\n<\/div>\n\n\n\n

Alex Templeton speaking at ECOBATE UK<\/h3>\n\n\n\n

<\/object><\/p>\n\n\n\n

Speaking at the Just Banking conference in April, Prof Richard Werner called for an end to the suppression and repression of the third sector, including mutually-owned financial institutions and credit unions, while also calling for the introduction of a \u201cregime of credit guidance\u201d. Werner, chair in international banking at University of Southampton School of Management and founding director of the Centre for Banking, Finance and Sustainable Development, said:<\/p>\n\n\n\n

\u201c[we need to] return the power to create and allocate money to the people, this privilege belongs to them \u2026 by having local banks we can have local money.\u201d<\/span><\/p>\n\n\n\n

Prof Richard Werner at the Just Banking conference on 20th April 2012<\/strong><\/p>\n\n\n\n

<\/object><\/p>\n\n\n\n

Ellen  Brown: <\/strong><\/h2>\n\n\n\n

Her solution to the US Credit Crisis.<\/strong><\/h2>\n\n\n\n

Speaking about the US but it resonates with us in Ireland<\/strong><\/h4>\n\n\n\n

 <\/h4>\n\n\n\n

<\/object><\/p>\n\n\n\n

The Sparkassen, <\/b>The German Public Savings Bank System<\/b><\/h2>\n\n\n\n

<\/b>The Sparkassen Public Saving Banks are<\/b><\/p>\n\n\n\n

  1. Independent of political influence and control.<\/li>
  2. Controlled by stakeholders from the local community.<\/li>
  3. Only allowed to lend only to local people and businesses in its designated catchment area.<\/li>
  4. Banned from engaging in financial speculation.<\/li>
  5. Operated on commercial principles with the aim of maximising sustainable lending and not on maximising profits.<\/li>
  6. Operated on the Principle of \u201cLocal deposits into local loans\u201d keeping capital in their own area.<\/li>
  7. Surpluses remain with the Bank & within the region: Profits are used to increase equity and for non-profit purposes (the public benefit principle). <\/span><\/li><\/ol>\n\n\n\n

    Germany with 40% Public Banks & 24% Co-op Banks essentially has 64% Public Banks. These banks increased their lending to the public & SME\u2019s during the current recession. This in no small part accounts for Germanys continued economic success and it coming through the current recession virtually unscathed. Lending increased to SME\u2019s by 17% from 2008 to 2011<\/p>\n\n\n\n

    Dr Thomas Keidel speaking at ECOBATE 2013 UK<\/strong><\/h4>\n\n\n\n