Join us! June 2-4, San Rafael, CA! Two evening events plus the PBI 2013 Public Banking Conference!

Public Banking Institute • PublicBankingInstitute.org

How DO we improve the economic livelihoods of millions of people? Reclaim the “money power” with publicly-owned banks. A network of publicly-owned banks across the United States holds the promise of local abundance, sustainable productivity, and the democratization of our economy.

Join the world’s pioneering policy thinkers, interested and informed citizens, civic leaders, banking entrepreneurs, and innovators for three events:

1. CONVERSATION. Featuring Matt Taibbi, Ellen Brown, Birgitta Jonsdotter and Gar Alperovitz. Sunday, June 2, 7-9:15pm. $35.
2. TPP Forum. Featuring David Brodwin, Margaret Flowers, Kevin Zeese, and Georgia Kelly. Monday, June 3, 7pm. Free.
3. PBI’s Public Banking Conference 2013: Funding the New Economy in San Rafael, CA, June 2-4. $265.

All three events will be held at Dominican University, Angelico Hall, in San Rafael, CA.

Register here.

Bail-out Is Out, Bail-in Is In: Time for Some Publicly-Owned Banks

Ellen Brown • www.opednews.com • April 30, 2013

“[W]ith Cyprus . . . the game itself changed. By raiding the depositors’ accounts, a major central bank has gone where they would not previously have dared. The Rubicon has been crossed.”
–Eric Sprott, Shree Kargutkar, “Caveat Depositor”

The crossing of the Rubicon into the confiscation of depositor funds was not a one-off emergency measure limited to Cyprus. Similar “bail-in” policies are now appearing in multiple countries. (See my earlier articles here.) What triggered the new rules may have been a series of game-changing events including the refusal of Iceland to bail out its banks and their depositors; Bank of America’s commingling of its ominously risky derivatives arm with its depository arm over the objections of the FDIC; and the fact that most EU banks are now insolvent. A crisis in a major nation such as Spain or Italy could lead to a chain of defaults beyond anyone’s control, and beyond the ability of federal deposit insurance schemes to reimburse depositors.

The new rules for keeping the too-big-to-fail banks alive: use creditor funds, including uninsured deposits, to recapitalize failing banks.

Read the article here.

PBI Newsletter, April 2013: Artificial Scarcity and Public Banking

PBI Newsletter, April 2013 • PublicBankingInstitute.org • April 29, 2013

The PBI (Public Banking Institute) April 2013 Newsletter is here!
Sign up for the Newsletter here.

The People’s Bank

Abby Rappaport • www.prospect.org • April 1, 2013

When the financial crisis struck in 2008, nearly every state legislature was left contending with massive revenue shortfalls. Every state legislature, that is, except North Dakota’s. In 2009, while other states were slashing budgets, North Dakota enjoyed its largest surplus. All through the Great Recession, as credit dried up and middle-class Americans lost their homes, the conservative, rural state chugged along with a low foreclosure rate and abundant credit for entrepreneurs looking for loans.

Normally one of the overlooked states in flyover country, North Dakota now had the country’s attention. So did an unlikely institution partly responsible for its fiscal health: the Bank of North Dakota. Founded in 1919 by populist farmers who’d gotten tired of big banks and grain companies shortchanging them, the only state-owned bank in America has long supported community banks and helped keep credit flowing.

Read the article here.

PBI’s Annual Public Banking Conference 2013, June 2-4, 2013, San Rafael, CA. Please join us!

Public Banking Institute • PublicBankingInstitute.org

How DO we improve the economic livelihoods of millions of people? Reclaim the “money power” with publicly-owned banks. A network of publicly-owned banks across the United States holds the promise of local abundance, sustainable productivity, and the democratization of our economy.

Join the world’s pioneering policy thinkers, interested and informed citizens, civic leaders, banking entrepreneurs, and innovators for PBI’s Public Banking Conference 2013: Funding the New Economy in San Rafael, CA, June 2-4.

Also, please note there is a special event on Sunday evening, June 2, open to the public, featuring our special guests, Matt Taibbi, Birgitta Jonsdottir, and Ellen Brown, 7-9:30pm. Tickets for this kick-off event will be sold separately.

Register here.

Creating a Finance System That Serves the People, Part II: Remaking the Federal Reserve, Building Public Banks and Opting Out of Wall Street

Kevin Zeese and Margaret Flowers • www.truth-out.org • April 17, 2013

In Part I of this series, we examined breaking up the too-big-to-fail-or- jail banks, regulating them – especially their massive and risky derivatives trading – and more aggressively enforcing laws and regulations against security fraud.

In Part II, we examine how to remake the Federal Reserve into a transparent, democratic institution that serves the necessities of the people and the economy, not just the bankers; how to develop public banks in every state and many cities throughout the nation; and how people can opt out of Wall Street right now.

Read the entire article here.

Before Next Crash, Create Finance System That Serves Public, Part I: Shrink, Regulate Banks, and Enforce Law

Kevin Zeese and Margaret Flowers • www.truth-out.org • April 10, 2013

Big finance – the too-big-to-jail banks that dominate the economy and government – is designed for financiers and does not benefit most people. That is why many are in rebellion against the looting class of Wall Street. But if we don’t like Wall Street finance, what would we replace it with? What would a finance system that served and protected the people look like?

It is time to put together a new kind of financial system. Since the crash of 2008, not only do fraud and high-risk investments continue with little regulation and lax enforcement, but policies that protect people have weakened. Experts predict that another collapse of the big banks is very possible. In our fragile economy, another crash could have devastating consequences.

The ideas we put forward in this series of articles are not final, but are a work in progress. In part I, we focus on approaches to regulation and breaking up the too-big-to-fail banks, as well as on the risk that derivatives pose to depositors. In part II, we will discuss the Federal Reserve, public banks, and ways to opt out of Wall Street now.

Read the entire article here.

Britain’s Post Office to offer current (bank) accounts

www.bbc.co.uk • April 10, 2013

The Post Office is to offer current accounts in the UK, following a regulator’s claim that the market offers little choice for consumers.

The new account, provided by Bank of Ireland, will be available in some areas in the coming weeks before a wider launch next year.

Few details have been released about the characteristics of the current account at this stage.

In January, a regulator said the market was dominated by a few providers.

The Office of Fair Trading (OFT) said that Lloyds, RBS, Barclays and HSBC held 75% of the market.

This led to a “lack of dynamism” from the banks, it said, together with a lack of choice for customers, meaning they were unlikely to switch to a different bank.

The Post Office, which has 11,500 branches, already offers a range of financial products in a link with Bank of Ireland.

Some three million Post Office customers already use products such as savings accounts, mortgages and insurance policies.

Read the entire article here.

It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors

Ellen Brown • http://www.huffingtonpost.com • April 3, 2013

Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few eurozone troika officials scrambling to salvage their balance sheets. A joint paper by the U.S. Federal Deposit Insurance Corporation (FDIC) and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds. New Zealand has a similar directive, discussed earlier here.

Read the entire article here.

School districts pay dearly for bonds…ANOTHER reason for publicly-owned banks!

Trey Bundy and Shane Shifflett, California Watch • http://www.sfgate.com • January 31, 2013

The Napa Valley Unified School District had a quandary: The district needed a new high school in American Canyon, but taxpayers appeared unwilling to take the financial hit required to build it.

So in 2009, the district took out an unusual loan: $22 million with no payments due for 21 years. By 2049, when the debt is paid, it will have cost taxpayers $154 million - seven times the amount borrowed.

…This form of borrowing has created billions of dollars in debt for taxpayers and hundreds of millions of dollars in revenue for financial advisers and underwriters. Voters are usually unaware of the bonds’ high interest. At least one state, Michigan, has banned their use.

Read the entire article here.

PBI Newsletter, March 2013: TPP and Public Banks, Cyprus, Letter from a Vermont Farmer, and more…

PBI Newsletter, March 2013 • PublicBankingInstitute.org • March 29, 2013

The PBI (Public Banking Institute) March 2013 Newsletter is here!
Sign up for the Newsletter here.

Yes, We Can Have Banks That Work For the People

Richard (RJ) Eskow • http://www.huffingtonpost.com • March 28, 2013

We all know the banking system is broken. It’s easy to become pessimistic in the face of corporate and political corruption, but the system can be changed. We’ve done it before, and we can do it again.

One pathway to genuine reform is “public banking”: the establishment of banks which are owned at operated by the government, and which serve people and small businesses directly. Here’s why public banking should be included in the agenda for deep and genuine financial reform.

Read the entire article here.

Understanding Money by John H. Hotson

John H. Hotson • PCDForum Article #15 • June 1, 1996

An understanding of the true nature of money is essential for those seeking economic reforms toward the creation of sustainable societies…

…Governments got into this mess by violating four common sense rules regarding their fiscal and monetary policies. These rules are:

1. No sovereign government should ever, under any circumstances, give over democratic control of its money supply to bankers.

2. No sovereign government should ever, under any circumstances, borrow any money from any private bank.

3. No national, provincial, or local government should borrow foreign money to increase purchases abroad when there is excessive domestic unemployment.

4. Governments, like businesses, should distinguish between “capital” and “current” expenditures, and when it is prudent to do so, finance capital improvements with money the government has created for itself.

Read the entire article here.

Richard Werner: Local Banks – Their Vital Role

Charles Bazlinton • www.youtube.com • May 20, 2011

“…Banks, in all countries at the moment, have been given the PRIVILEGE to creating the money supply, and allocate the money as they see fit.”

In the UK the Coalition Government has for some time been pleading the banks to lend to small and medium-sized businesses – with the aim of kick-starting economic growth. But it has not worked. In this video interview Professor Werner shows how this failure is particular to the UK due to the size of the banks. There is a mismatch. These huge centralised international banks are not suited for lending to local and regonal businesses. This means that small local businesses are throttled and the shape of the economy is skewed in favour of large firms. A Government committed to localism and the participation of all under its Big Society banner should heed Dr Werner’s clear agenda of what should be done now to provide Banking for the BIg Society.

 

Watch the video here.

A Safe and a Shotgun or Public Sector Banks? The Battle of Cyprus

Ellen Brown • www.counterpunch.org • March 22, 2013

On Tuesday, March 19, the national legislature of Cyprus overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout. Reuters called it “a stunning setback for the 17-nation currency bloc,” but it was a stunning victory for democracy. As Reuters quoted one 65-year-old pensioner, “The voice of the people was heard.”

…The move was bold, but the battle isn’t over yet. The EU has now given Cyprus until Monday to raise the billions of euros it needs to clinch an international bailout or face the threatened collapse of its financial system and likely exit from the euro currency zone.

…The deal pushed by the “troika” – the EU, ECB and IMF – has been characterized as a one-off event devised as an emergency measure in this one extreme case. But the confiscation plan has long been in the making, and it isn’t limited to Cyprus.

Read the article here.

North Carolina’s State Senator’s bill SB150 to study state-run bank considered long shot

Deon Roberts • www.charlotteobserver.com • March 19, 2013

In a state that’s a hub for banking, an N.C. senator is sponsoring a bill that even she admits has little chance of passage. Her measure calls for a study of a potential state-owned bank.

Eleanor Kinnaird, a Chapel Hill Democrat who says she has “very little love for this industry,” is the primary – and so far only – sponsor for Senate Bill 150, which calls for the creation of a commission to study the impact of a state-owned bank that would receive deposits of state funds.

If Kinnaird is successful, North Carolina would become the second state to have a state-owned bank. The only state with one is North Dakota.

Kinnaird’s bill doesn’t call for the creation of a state-run bank – only a study on the issue – but if such a bank were created, public dollars that state agencies now deposit in privately run banks would be deposited into the state-run bank.

Read the article here.

Read the bill SB150 here.

Proposal for Maine State Bank Back on Legislative Agenda

Tim Porter • www.mpbn.net • December 10, 2012

Two lawmakers are re-introducing a bill this session to establish a Maine state bank. Rep. Diane Russell, of Portland, and fellow Democrat Bobbi Beavers, of South Berwick, are gathering support for their proposal – which envisages, not so much a retail bank where you or I can open an account, but more of a mini-central bank where state dollars are invested, rather being invested in Wall Street. This, they say, would make more credit available to small businesses.

Read the article here.

Public Banking Institute director to speak in Thomaston March 14

www.penbaypilot.com • March 10, 2013

On Thursday, March 14, at 5 p.m., Marc Armstrong will present a discussion on public banking at St. John Baptist Episcopal Church, 200 Main Street, in Thomaston.

The presentation, entitled “Why deposit public money in Wall Street banks, only to have to borrow it back?, ” will guide participants through a discussion making the case that public money (tax revenues, fees) should be placed in public institutions for the benefit of the public.

Event Date:
Thu, 03/14/2013 – 5:00pm

Event Location:
St. John Baptist Episcopal Church

Address:
200 Main Street
Thomaston, Maine

Contact Phone:
(207) 354-8734

Read the article here.

THE MYTH OF DEBT

Chris Cook • www.heraldscotland.com • March 10, 2013

It lies at the heart of the world’s financial crisis and threatens to derail every solution we try … but the global debt problem won’t be solved by a traditional view of economics.

…THE clearing banks of course have their own power to create money, for the purposes of lending. They are responsible for most new money in the modern system, accounting for about 97% compared to 3% from the Bank of England.

They, too, are the subject of a well-peddled myth, which is that deposits are first collected by banks and then spent or loaned into circulation on the basis of requiring a certain reserve level of deposits to be maintained. In fact, there is no constraint on UK credit/money creation of reserves: the constraint on modern money creation by private banks is the capital required to cover losses on loans. Private banks first lend or spend what are essentially “lookalikes” of central bank money and then fund their dated interest-bearing loans (assets) with dated interest-bearing deposits (liabilities).

Putting most money creation into the hands of organisations whose raison d’etre is to make money from lending (and more recently, from speculation) is behind much of what has gone wrong with the financial system. As with all historic bubbles, the profit motive drove excessive credit creation.

…FROM these observations, I reach two conclusions. First, the clearing banks cannot be trusted to freely create the credit which is modern money. If money is to be created by a middleman or intermediary then it should be either the central bank or the Treasury itself.

…MY second conclusion is that we must revisit the concept of the national debt itself and recognise it for the national equity it is in reality. We have only saddled ourselves with this debt delusion because we have forgotten what the true relationship actually is between public spending and taxation.

Read the article here.

Quantitative Easing for the People: Default on the Public Debt, Nationalize the Banks, and a Dividend for Citizens

Ellen Brown • www.commondreams.org • March 7, 2013

Comedian Beppe Grillo was surprised himself when his Five Star Movement got 8.7 million votes in the Italian general election of February 24-25th. His movement is now the biggest single party in the chamber of deputies, says The Guardian, which makes him “a kingmaker in a hung parliament.”

Grillo’s is the party of “no.” In a candidacy based on satire, he organized an annual “V Day Celebration,” the “V” standing for vaffanculo (“f—k off”). He rejects the status quo—all the existing parties and their monopoly control of politics, jobs, and financing—and seeks a referendum on all international treaties, including NATO membership, free trade agreements and the Euro.

…Steve Colatrella, who lives in Italy and also has an article in Counterpunch on the Grillo phenomenon, has a different take on the surprise win. He says Grillo does have a platform of positive proposals. Besides rejecting all the existing parties and treaties, Grillo’s program includes the following:

• unilateral default on the public debt;
• nationalization of the banks; and
• a guaranteed “citizenship” income of 1000 euros a month.

It is a platform that could actually work. Austerity has been tested for a decade in the Eurozone and has failed, while the proposals in Grillo’s plan have been tested in other countries and have succeeded.

Read the article here.

State-Owned Banks made it to the website of the NCSL (National Conference of State Legislation)

http://www.ncsl.org • January 16, 2013

State-Owned Financial Institutions 2012 Legislation

Last Updated: Jan. 16, 2013

NCSL Staff Contact: Heather Morton, 303.364.7700 (Denver)

With the struggling economy, state legislators are investigating state-owned banks, similar to the Bank of North Dakota, as a way to encourage economic development and generate revenue. This kind of institution is also known as a public or partnership bank. The Bank of North Dakota, formed in 1919 by the North Dakota Legislative Assembly, is the only state-owned bank operating in the United States. The legislation list below does not include information on infrastructure banks, as they are separate entites from state-owned banks.

In the 2012 legislative session, 20 bills and resolutions were pending in 15 states to study the issue or to create a state bank or investment trust.

Related NCSL Webpages:

NCSL LegisBrief: Are State-Owned Banks a Viable Option?
2011 Legislation
2010 Legislation

Read the webpage here.

PBI’s Annual Public Banking Conference 2013, June 2-4, 2013, San Rafael, CA. Please join us!

Public Banking Institute • PublicBankingInstitute.org • February 11, 2013

How DO we improve the economic livelihoods of millions of people? Reclaim the “money power” with publicly-owned banks. A network of publicly-owned banks across the United States holds the promise of local abundance, sustainable productivity, and the democratization of our economy.

Join the world’s pioneering policy thinkers, interested and informed citizens, civic leaders, banking entrepreneurs, and innovators for PBI’s Public Banking Conference 2013: Funding the New Economy in San Rafael, CA, June 2-4.

Also, please note there is a special event on Sunday evening, June 2, open to the public, featuring our special guests, Matt Taibbi, Birgitta Jonsdottir, and Ellen Brown, 7-9:30pm. Tickets for this kick-off event will be sold separately.

Register here.

PBI News Alert: Matt Taibbi, Public Banking Conference 2013, June 2-4, 2013, Promo code & more…

PBI News Alert • PublicBankingInstitute.org • February 8, 2013

How often do you get a chance to join with other creative minds discussing how best to redesign the banking systems of nations, in ways that would create new prosperity for millions and help to rebuild local economies? This year, just once.

Read the entire PBI News Alert here.

A breakthrough speech on monetary policy…that governments should create money and distribute it directly to citizens.

Anatole Kaletsky • blogs.reuters.com • Februrary 7, 2013

Wednesday night may have marked the “emperor’s new clothes” moment of the Great Recession, in which the world suddenly realizes its rulers are suffering from a delusion that doesn’t have to be humored. That delusion today is economic fatalism: the idea that nothing can be done to break the paralysis in the global economy and therefore that a “new normal” of mass unemployment and declining living standards is inevitable for years or decades to come.

That such economic fatalism is nonsensical is the key message of a truly historic speech delivered on Wednesday by Adair Turner, chairman of Britain’s Financial Services Authority and one of the most influential financial policymakers in the world. Turner argues that a virtually surefire method of stimulating economic activity exists today and that politicians and central bankers can no longer treat it as taboo: Newly created money should be handed out to the citizens or governments of countries that are mired in stagnation and such monetary financing of tax cuts or government spending should continue until economic activity revives.

Read the article here.

Should Banks be a Public Utility? Yes.

The Real News • TheRealNews @ youtube.com • October 11, 2011

Leo Panitch: The OWS movement should adopt the demand for banking in the public interest which challenges the system.

 

Read the article and transcript here.
See the video here.

Olafur Ragnar Grimsson Iceland President ‘Let banks go bankrupt’

Aljazeera.com • January 25, 2013

Iceland President Olafur Ragnar Grimsson tells Al Jazeera’s Stephen Cole that Europe should let banks that are ran “irresponsibly” go bankrupt. Speaking at the annual World Economic Forum in Davos, Grimsson also held his country as a model of economic recovery after its near-collapse four years ago. “We didn’t follow the traditional prevailing orthodoxies. And the end result four years later is that Iceland is enjoying progress and recovery.”

 

See the video here.

School districts pay dearly for bonds…A MAJOR reason for state-owned banks!

The Real News • TheRealNews @ youtube.com • January 26, 2013

The Napa Valley Unified School District had a quandary: The district needed a new high school in American Canyon, but taxpayers appeared unwilling to take the financial hit required to build it.

So in 2009, the district took out an unusual loan: $22 million with no payments due for 21 years. By 2049, when the debt is paid, it will have cost taxpayers $154 million – seven times the amount borrowed.

…In California, where rules governing the loans are among the loosest, more than 400 school districts and other agencies have racked up greater capital appreciation bond debt in the past six years than agencies in any other state.

They have borrowed $9 billion that will cost taxpayers $36 billion to repay over the next 40 years, according to data compiled by California Treasurer Bill Lockyer. He called it “debt for the next generation.”

Read the article here.

Breaking Up the Big Banks is Not a Solution

The Real News • TheRealNews @ youtube.com • January 26, 2013

Leo Panitch: Global capitalism needs massive banks, but big private banks have the power to prevent regulation and threaten more crisis; the solution is not breaking them up but making them public.

 

Read the article and transcript here.
See the video here.

The Cook Plan – Richard C. Cook on Economics 101

CorbettReport • youtube.com • October 13, 2009

A veteran economic analyst and former Project Manager at the U.S. Treasury, Richard C. Cook joins us to discuss his “Cook Plan” to resuscitate the economy. We also discuss monetary reform and his new book We Hold These Truths: The Hope of Monetary Reform.

 

See the video here.

Richard C. Cook: Credit As a Public Utility –The Solution to the Economic Crisis

Richard C. Cook • youtube.com • April 21, 2011

First part of six:

See the video here.

Hundreds Hold Demonstrations in Athens to Say NO to Privatization of State Banks

http://www.presstv.ir • December 18, 2012

Employees of the Hellenic Post Bank (HPB) staged a walkout outside the Finance Ministry on Monday.

The new Greek coalition government initially announced plans to sell off national banks, such as HPB, in early September.

HPB is a state-controlled lender and currently has over 2,000 employees.

The protesters are united in their opposition to the government’s plan to privatize state banks and have urged Finance Minister Yannis Stournara to change his decision on the sale.

Read the entire article here.

Ellen Brown: The Trillion-dollar Coin: Joke or Game Changer?

Ellen Brown • http://huffingtonpost.com/ • January 15, 2013

…It’s all good fun — or is it? Most commentators have missed the real significance of the trillion-dollar coin. It is not just about political gamesmanship. For centuries, a secret battle has raged over who should create the nation’s money supply — governments or banks. Today, all that is left of the U.S. Treasury’s money-creating power is the ability to mint coins. If we the people want to reclaim that power so that we can pay our obligations when due, the Treasury will need to mint more than nickels and dimes. It will need to create some coins with very large numbers on them.

To bail out the banks, the Federal Reserve, as head of the private banking system, issued over $2 trillion as “quantitative easing,” simply by creating the money on a computer screen. Congress, the White House, and the Treasury all rolled over and acquiesced. When it was proposed that the government bail itself out of its budget woes by minting a $1 trillion coin, the Federal Reserve said it would not accept the Treasury’s legal tender. And the White House again acquiesced, evidently embarrassed to have entertained this “ludicrous” alternative.

Somehow we have come to accept that it is less silly for the central bank to create money out of thin air and lend it at near zero interest to private commercial banks, to be re-lent to the public and the government at market interest rates, than for the government to simply create the money itself, debt- and interest-free.

Read the entire article here.

From TIME Magazine! Are State-Owned Banks the Antidote to the Too-Big-To-Fail Epidemic?

Christopher Matthews • http://business.time.com/ • January 15, 2013

The American Great Plains are known for their expansive farm lands, endless horizons, and — in recent history — staunchly conservative politics. So it may come as a surprise that only state-owned bank in the U.S. (an institution more widely associated with communist China than the Republican Party) can be found in ruby-red, rural North Dakota.

That’s right, The Bank of North Dakota (BND) — the largest bank in the state by deposits — was founded by legislative mandate in 1919, and has been a mainstay of the North Dakotan economy since that time, mostly through partnering with community banks to provide loans for local businesses. And advocates of public banking are holding up the BND as an example of what government-owned banks can do for an economy.

Read the entire article here.

EU Debt Write Off: Cancelling Debt when a Country is Both Debtor and Creditor

Anthony J. Evans and Terrence Tse • http://econ.anthonyjevans.com • August 24, 2012

This page presents the results of a simulation conducted by students at ESCP Europe Business School. The aim was to uncover the amount of interlinked debt between Portugal, Ireland, Italy, Greece, Spain, Britain, France, and Germany; and then see what would happen if they attempted to cross cancel obligations.

The results were astounding:

• The countries can reduce their total debt by 64% through cross cancellation of interlinked debt, taking total debt from 40.47% of GDP to 14.58%
• Six countries – Ireland, Italy, Spain, Britain, France and Germany – can write off more than 50% of their outstanding debt Three countries
• Ireland, Italy, and Germany – can reduce their obligations such that they owe more than €1bn to only 2 other countries
• Ireland can reduce its debt from almost 130% of GDP to under 20% of GDP
• France can virtually eliminate its debt – reducing it to just 0.06% of GDP

For more information download the full report: The Great EU Debt Write Off (.pdf).

The idea is very simple – if Portugal owes Ireland €0.34bn of short term debt, and Ireland owes Portugal €0.17bn, we can write off Ireland’s obligations and leave Portugal with a reduced debt of €0.17bn. If you are both a debtor and a creditor you do not need money to settle claims. Rather than require additional funds to deal with choking debt, why not write it off?

Read the entire article here.
Get the report (.pdf) here.

Public Banks: helping workers by helping people

Mike Krauss • http://www.opednews.com/ • January 11, 2013

In the decades after World War II, the American people built up the greatest and most broadly shared prosperity the world had ever seen. But for about the past forty years, the vast wealth of America has been steadily concentrated among a relative handful of our citizens.

This period of declining prosperity for the 99 percent has corresponded exactly with the decline of American unions. It does not take a rocket scientist to understand that strong unions are vital to a broadly prosperous and democratic America.

Read the entire article here.

Latvian Financial Crisis involving the EBRD (European Bank for Reconstruction and Development), Parex Bank, and Ernst & Young

Latviabrd @ yahoo.com • June 26, 2012

Latvian Crisis involving the EBRD (European Bank for Reconstruction and Development), Parex Bank, and Ernst & Young.

The link to the video is here.

The economic return of Iceland has proved that the joke was on us

Dan White • http://www.independent.ie • December 16, 2012

WAY back in the autumn of 2008, the joke in financial circles was that the only difference between Ireland and Iceland was a letter and six months…

Meanwhile, we in Ireland did what we were told and repaid over €70bn of bank bonds at par. By doing so, even at the cost of bankrupting the State, the “experts” assured us that we would retain the confidence of the markets. Now, four years later, it is clear that, not for the first time, the “experts” have got it wrong. Catastrophically and utterly wrong…

Unlike Ireland, Iceland immediately nationalised its bust banks in the autumn of 2008 but refused to assume responsibility for their liabilities.

Read the entire article here.

PBI Newsletter, December 2012: Note from the Chairman: Flying Over the Cliff with Seasonal Cheer

PBI Newsletter, December 2012 • PublicBankingInstitute.org • December 18, 2012

The PBI (Public Banking Institute) December Newsletter is here!
Sign up for the Newsletter here.

Iceland’s Hörður Torfason – How to Beat the Banksters

Alex Pietrowski • http://www.wakingtimes.com • December 11, 2012

The tiny Nordic European island country of iceland is presently experiencing one of the greatest economic comebacks of all time. After the privatization of the banking sector completed in 200o, the economy was thrown into a tailspin when over a five year period, private bankers borrowed 120 billion dollars (10 times the size of Iceland’s economy). A huge economic bubble was created, causing house prices to double, and making a small percentage of Iceland’s population rich enough to buy up overseas investments, mansions, yachts, and private jets, while leaving an absolutely un-payable debt for all Icelanders. Iceland was facing national bankruptcy.

In response to the failed banking system, in October 2008, Iceland’s revolution against this financial tyranny began, rather casually in the street, in front of the Icelandic general assembly.

In the duration of five months, the main bank of Iceland was nationalized, government officials were forced to resign, the old government was liquidated, and a new government was put in its place. By March 2010, Iceland’s people voted to deny payment of the 3,500 million Euro debt created by the bankers, and about 200 high-level executives and bankers responsible for the economic crisis in the country were either arrested or were facing criminal charges.

In February 2011, a new constitutional assembly settled in to rewrite the tiny nation’s constitution, which aimed to avoid entrapment by debt-based currency foreign loans. In 2012, Iceland’s economy is expected to outgrow the Euro and the average for the developed world, as estimated by the Paris-based Organization for Economic Cooperation and Development.

 

Read the entire article here.

School District Owes $1 Billion On $100 Million Loan

Richard Gonzales • http://www.npr.org • December 7, 2012

More than 200 school districts across California are taking a second look at the high price of the debt they’ve taken on using risky financial arrangements. Collectively, the districts have borrowed billions in loans that defer payments for years — leaving many districts owing far more than they borrowed.

In 2010, officials at the West Contra Costa School District, just east of San Francisco, were in a bind. The district needed $2.5 million to help secure a federally subsidized $25 million loan to build a badly needed elementary school.

Charles Ramsey, president of the school board, says he needed that $2.5 million upfront, but the district didn’t have it.

Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.”We’d be foolish not to take advantage of getting $25 million” when the district had to spend just $2.5 million to get it, Ramsey says. “The only way we could do it was with a [capital appreciation bond].”

In the West Contra Costa Schools’ case, that $2.5 million bond will cost the district a whopping $34 million to repay.

Read the entire article here.

The Linchpin Tipping Point to Reverse Centuries of Top Down, 1% Power and Privatization? PUBLIC BANKING!

Rob Kall • http://www.opednews.com • December 6, 2012

Tonight I went to a local meeting of the Public Banking Institute with Ellen Brown as the featured speaker. First, I joined the local organizers of the meeting, Brown and the director of the institute, Mark Armstrong.

The lecture and the conversations before and after really helped me connect some dots that tie together single payer health care, Naomi Klein’s Shock doctrine, tea partiers, bankrupt cities, global bankers like the Rothschilds, the class war and the war of the top-down powers against the bottom up revolution.

First, some notes from Ellen Brown’s lecture:

A -public bank is not for the public- it’s created to serve in the public interest– but is a bank for bankers, not the public– no front offices, no advertising, no big staffs.

There’s only one state with a public bank– North Dakota– and it is the state that has done better than every other state in terms of making budget and low unemployment.

Public banks serve governments– cities, counties, municipalities, states and in other parts of the world, whole countries. They serve them by making interest-free loans to them and by earning far greater interest on money they have. And they have a lot of money– government employee pension funds, rainy day funds” which ordinarily earn a tiny amount compared to what they would earn if a bank was using them to earn interest.

Mike Krauss, chairman of the Pennsylvania Public Banking project told the group, “Our thrust is to decentralize credit and decentralize wealth holding– a decentralization of wealth will create a decentralization of political power.”

Read the entire article here.

Ellen Brown’s debt-reduction coin solution makes it to the Washington Post: Could two platinum coins solve the debt-ceiling crisis?

Brad Plumer • http://www.washingtonpost.com • December 7, 2012

If President Obama wants to avoid an economic calamity next year, he could always show up at a press conference bearing two shiny platinum coins, worth… $1 trillion apiece.

A mere $100? Pshaw. Try $1 trillion. (Associated Press)

Okay, that sounds utterly insane. But ever since last year, some economists and legal scholars have suggested that the “platinum coin option” is one way to defuse a crisis if Congress can’t or won’t lift the debt ceiling soon. At least in theory….

Read the entire article here.

Ensuring Scottish Sovereignty: Exploring the Public Bank Option

Ellen Brown • http://www.truthdig.com • December 7, 2012

The Royal Bank of Scotland (RBS) and the Bank of Scotland have been pillars of Scotland’s economy and culture for over three centuries. So when the RBS was nationalized by the London-based UK government following the 2008 banking crisis, and the Bank of Scotland was acquired by the London-based Lloyds Bank, it came as a shock to the Scots. They no longer owned their oldest and most venerable banks.

Another surprise turn of events was the triumph of the Scottish National Party (SNP) in the 2011 Scottish parliamentary election. Scotland is still part of the United Kingdom, but it has had its own parliament since 1999, similar to U.S. states. The SNP has rallied around the call for independence from the UK since its founding in 1934, but it was a minority party until the 2011 victory, which gave it an overall majority in the Scottish Parliament.

Scottish independence is now on the table. A bill has been introduced to the Scottish Parliament with the intention of holding a referendum on the issue in 2014.

Read the entire article here.

Breaking free of Wall Street and the boom-bust cycle…with PUBLIC Banks!

Mike Krauss • http://www.phillyburbs.com • November 30, 2012

…While Americans view the economic contraction and recession as global, it isn’t. It is highly localized to the economies of the United States and Europe, which are most closely tied to the central bank cartel of Wall Street and Federal Reserve private banking system. But in many other nations, where on the average 40 percent of the market is in public banks, economies are growing.

These are the so called BRIC nations (Brazil, Russia, India and China), as well as Australia, New Zealand, Canada, Iceland, South Africa and Japan; and the healthiest economy in Europe, Germany, where public banks have existed for decades and provided much of the credit and investment for West Germany’s recovery from World War II. The public “Post Office Bank” in Japan played the same role there.

This is not to say that these nations have not felt the impact of declining exports to the sick economies of the U.S. and Europe. They have. But no one in China, or Brazil or India is talking austerity.

Just the failed central bankers and the 1 percent in the U.S. and Europe who caused the catastrophe….

Read the entire article here.

Ellen Brown’s Presentation at the 3rd Annual World Conference on Riba: PUBLIC BANKING: MAKING MONEY WORK FOR THE PEOPLE

Ellen Brown • http://www.worldribaconference.org/ • November 26, 2012

Nov. 26-27, 2012
3rd Annual World Conference on Riba: The Multifaceted Global Crises of RIBA: Resilience, Response & Reform
Palace of Golden Horses
Mines Wellness City, Kuala Lumpur, Malaysia

Main Speakers:
1. Tun Dr. Mahathir Mohamed, Fourth Prime Minister of Malaysia
2. Ellen Hodgson Brown, Chairman/President of Public Banking Institute, USA
3. Bill Still, Best Selling Author and Award-Winning Documentary Writer/Director
4. Hugo Salinas- Price, President, Mexican Civic Association Pro Silver, A.C.
5. Imran Nazar Hosein, Renowned Author and Scholar in Islamic Eschatology
6. Tom J. Kennedy, Activist & Blogger, http://usuryfree.blogspot.com
7. Imam Afroz Ali, President , Al-Ghazzali Centre for Islamic Sciences & Human Development, Sydney.
8. Professor Dr. Ahamed Kameel Mydin Meera, Dean, IIUM Institute of Islamic Banking & Finance, Malaysia
9. Professor Dato dr. Hj. Mohd Ali Baharom, President, Malaysia National Cooperative Movement
10. YM Tunku Azwil Tunku Abdul Razak, Muslim Consumers Association of Malaysia
11. Dr. Zulkifli Hassan, Faculty of Shariah & Law, Islamic Science University of Malaysia

A .pdf version of ELlen Brown’s presentation is here.
A .ppt version of Ellen Brown’s presentation is here.

Ellen Brown’s Presentation to RSA Scotland: A Public Bank for Scotland?

Ellen Brown • http://www.thersa.org • November 22, 2012

RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) Scotland hosted an event exploring the concept of a public bank for Scotland.
Thursday 22nd November 2012
Riddle’s Court, 322 Lawnmarket, Edinburgh

Ellen Brown, Chair and President of the Public Banking Institute in the USA discusses the history of public banking in the States, particularly in North Dakota which founded its public bank in 1919. Ralph Leishman FRSA presents how a public bank might develop and work with government in the Scottish context and banking environment, with substantial time available for questions and discussions with the speakers.

A .pdf version of the presentation is here.
A .ppt version of the presentation is here.

State-run banks: a movement driven by unusual politics

Marshall Swearingen • http://www.hcn.org • November 26, 2012

During Tea Party champion Joe Read’s first session in the Montana Legislature, in 2011, he drew widespread ridicule for introducing a bill that declared global warming “beneficial to the welfare and business climate of Montana.” With another anti-science bill, Rep. Read called for Montana’s government to overrule federal regulations on greenhouse gases. He also passed out 170 DVDs of The Secret of Oz, a low-budget video charging that the Federal Reserve system has been corrupted by corporate bankers, symbolized by the “Wicked Witches” in the original Wizard of Oz.

The DVDs were part of Read’s attempt to create the “Last Chance State Bank,” named for a gulch where gold was mined in the 1800s. The colorful name also cut to the urgency of Read’s banking concerns: Desperate to fix a broken fiscal system, he envisioned that the Last Chance State Bank would be run by Montana’s government.

None of those bills became law, but the bank measure attracted a surprising supporter — Rep. Sue Malek, a Democrat who represents Missoula, a college town. Malek herself sponsored a bill supporting the state-bank idea (which also went nowhere), and Read wholeheartedly supported it…

“You hear that giant sucking sound?” read a flier circulated by the Service Employees International Union in Oregon in 2011. “That’s Wall Street’s big banks sucking up all the public dollars out of Oregon. (The state) does billions of dollars of business with big banks like Bank of America, JPMorgan Chase, and Wells Fargo … And what do we have to show for it? 28,000 homes in foreclosure, 10.6% unemployment, and devastating cuts to vital services.”

Read the article here.

A Reappraisal of State-Owned Banks

Eduardo Levy Yeyati, Alejandro Micco, & Ugo Panizza • http://www.brookings.edu • Spring 2007

A reappraisal of state-owned banks
Authors: Eduardo Levy Yeyati; Alejandro Micco; Ugo Panizza
Year: 2007
Published in: Economia : Journal of the Latin American and Caribbean Economic Association. – Washington, DC : Brookings Institution Press, ISSN 1529-7470, ZDB-ID 20698392. – Vol. 7.2006/07, 2, p. 209-247.

Abstract
We revisit the public banks debate, survey the theoretical arguments and test the robustness (and expand) the existing empirical evidence. While we find some support for the view that public banks do not allocate credit optimally, we also report indicative evidence that they exert a positive influence on private bank efficiency, and may contribute to reduce credit procyclicality. Ultimately, we find that the recent criticism to public banks has generally been based on inconclusive cross-country evidence. More specific bank-level research is still needed to substantiate a case for or against public banks in developing economies.

This paper is divided into three parts. The first part describes the evolution of state ownership of banks in Latin America and the rest of the world. The second part discusses the theoretical justification for the existence of public banks. The third part surveys the existing empirical evidence and presents some new results.

Read the entire paper here.
A .pdf version of the paper is here.

The 10 Major Brazilian banks — 3 of 10 Major Banks in Brazil are Publicly Owned

Andréa Novais • http://thebrazilbusiness.com • April 10, 2012

1 – Banco Bradesco Financiamentos. Founded in 1943, in the city of Marília, São Paulo, Banco Bradesco is the second largest private bank in Brazil. It is currently headquartered in Osasco, SP, at Companhia Cidade de Deus. Over its almost 70 years of existence, Bradesco has acquired several financial institutions in Brazil, such as Banco do Estado do Maranhão, Banco Morada, Banco de Crédito Nacional (BCN), Banco do Estado do Ceará and Banco Boavista. In 2006, Bradesco took over the American Express credit card operations in Brazil. Official website: http://www.bradesco.com.br

2 – Caixa Econômica Federal. Founded in 1861, Caixa Econômica Federal is a public bank owned by the federal government and is the only working with FGTS, PIS and the payment of unemployment insurance. It is also where all benefits offered by the federal government, such as Bolsa Família, are paid. Its expertise is banking services, FGTS, PIS, unemployment insurance and other initiatives made by the federal government, such as Programa Minha Casa, Minha Vida. Official website: http://www.caixa.gov.br

3 – HSBC. HSBC is a commercial and an investment bank organized within four business groups: commercial banking; global banking and markets; personal financial services and global private banking. Present in 87 countries, HSBC is present in Brazil since 1997 and is headquarted in Curitiba, PR. Official website: http://www.hsbc.com.br

4 – Banco J Safra S/A. Banco Safra is one of the 10 major Brazilian banks, operating in all banking divisions, focusing on companies and upper-class customers. Established in 1955, it is headquartered in São Paulo. Official website: http://www.safra.com.br

5 – Banco Itaú. Since the acquisition of Unibanco, in 2008, Itaú saw its market value increase 120%, becoming one of the 10 major banks in the world and the largest financial conglomerate in Latin America. Headquartered in São Paulo, Itaú is a branch of Itaú Unibanco Holding SA. It has operations in Argentina, Chile, Paraguay, Uruguay, England, Luxembourg, Portugal, USA, Japan, China and United Arab Emirates. Its major focus is financial services, such as commercial and corporate banking, besides insurance, assets management and capitalization plans. Official website: http://www.itau.com.br

6 – Banco do Estado do Rio Grande do Sul S/A. Banco do Estado do Rio Grande do Sul (or simply Banrisul), is a state-owned bank focused on business in Southern Brazil. Present in 364 cities, most of them concentrated in Rio Grande do Sul state, Banrisul is headquartered in the city of Porto Alegre and its major focus are banking services. Official website: http://www.banrisul.com.br

7 – Banco PanAmericano S/A. Founded by Grupo Silvio Santos in 1969, PanAmericano has operated as a multi-service bank since 1991, having started its credit card operations in 1994. PanAmericano Seguros was incorporated to the bank in 1999. In 2009 Caixa Econômica Federal bought part of the bank’s shares and became the second largest shareholder of the institution. Official website: http://www.panamericano.com.br

8 – Banco Santander. Santander fisrt came to Brazil in 1982, but it was only in 1991 that Santander Investment operations have begun. The Brazilian operation is considered to be the most important one, being responsible for 25% of the bank profit. In 1997 Grupo Santander acquired Banco Geral do Comércio and in 1998 and the control of Banco Banespa. In 2008 it acquired the Latin American operation of ABN Amro Bank and became the third major bank in Brazil in terms of assets. Official website: http://www.santander.com.br

9 – Banco do Brasil. Banco do Brasil is the largest Brazilian and Latin American bank in terms of assets and third by market value. Headquartered in Brasília, Banco do Brasil was founded in 1808 and is the oldest active bank in Brazil. The bank is controlled by the Brazilian government and since 2000 it is one of the four most-profitable Brazilian banks, holding a strong leadership position in retail banking. Its major services are the issuance of boletos, ATM loans, automatic payments, and the account holder may apply for international Mastercard and Visa debit cards. Also, the bank has got offices I several locations throughout the world, such as Amsterdan, Buenos Aires, Dubai, La Paz, Miami, New York City, Santiago and others. Official website: http://www.bb.com.br

10 – Citibank. Citibank Brasil is headquartered in São Paulo and is a branch of Citigroup FNC, the largest multi-bank in the world. The bank came to Brazil in 1915 and is present in 21 of the 26 Brazilian states. Official website: http://www.citibank.com.br

Read the article here.

Public Banks in Latin America

Alejandro Micco & Ugo Panizza • http://www.iadb.org • February 25, 2005

Public Banks in Latin America
Background paper prepared for the conference on Public Banks in Latin America: Myth and Reality Inter-American Development Bank (February 25, 2005)

Government ownership of banks is a major phenomenon worldwide. In 1995 the average percentage of state ownership in the banking industry around the world was about 41.6 percent (Figure 1). This share was even larger during the 1970s, when more than 50 percent of worldwide bank assets were controlled by the public sector. Ideological changes regarding the state’s role in the economy, as well as financial crises, led governments to privatize financial institutions. Megginson (2004) documents that worldwide, from 1987 to 2003 more than 250 banks were privatized, raising US$143 billion.

Read the entire report here.
The 2005 Conference details are here.