There is a conference on public banking in Manchester this Saturday featuring some of the leading thinkers on banking reform. Details here. I suspect I would not agree with everything that will be said, but it looks like it could be an interesting day.
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With Professor Richard Werner and Ellen Brown, it should indeed be an interesting day. Dr Thomas Marois of SOAS will also be talking about how public banks drive development and there will be speakers from Positive Money, MoveYourMoney, New Economics Foundation and a leading campaigner from Ireland where local public banking as per the Sparkasse model is on the manifesto of four of the political parties for the upcoming election.
Ireland has had lots of visits from the Sparkasse outreach programme, the SBFIC (http://www.sparkassenstiftung.de/en/about-us.html). They have already put a lot of documents together about how a Sparkasse model could work in Ireland.
The Sparkasse do not get involved in financial gambling and actually INCREASED their lending to SMEs throughout the financial crisis to nurse them through the difficult times, and so this helped Germany emerge from the recession far sooner than we did.
Apparently they say they do not recommend that senior managers of recently nationalised banks should stay on as their ethos is so alien to the public banking model of working for the public benefit. Private banks promote people who are driven by commissions and bonuses with no feeling for the common good and with no guilt for what they do. These people are weeded out of Sparkasse banks and in their experience, these managers cannot be changed and cannot be trusted to manage a public bank. If they are kept on or “transferred” into a public bank to make it more “efficient” (we need a different measure for efficiency than pure profits) they cause lots of problems. But if managers are trained and promoted from within, then we can have Sparkassen.
But how to start? Local business people? A buddy system? It’s good that the SBFIC understands this problem and is willing to help countries with banking systems dominated by greedy private banks to the more diversified system that is so successful in Germany (40% of banking in Germany is public banking – national, regional and local)
I’m looking forward to the conference.