In late December, Washington State’s Treasurer’s office released a report that made many negative conclusions about public banks that were not based on any of the studies the report cited. PBI Chair Ellen Brown writes a response to correct the report:
“The only report actually addressing Washington State was the 2010 study by the Center for State Innovation. It concluded, ‘a state bank would have a positive effect on state revenue and could effectively strengthen the banking industry and create and sustain jobs through a revenue positive investment in a state bank.’ The $100 million the CSI recommended in capitalization was not stated as a reason not to do it. Capitalizing a bank is not an expenditure; it is an investment repaid over time with profits. The CSI study said the funds could be acquired through a bond issue repaid with bank dividends. Assuming a 10 percent capitalization requirement, the result would be a bank with a potential $1 billion portfolio, which could make below-market loans for those state and local infrastructure needs sorely lacking funding today.”
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