Public banks are needed to stop the next financial crisis

BofA foreclosed

Photo by scad_lo courtesy Common Dreams

 

Public banks will be critical to navigate the next financial crisis. Thomas Hanna explains why in Common Dreams:

“There will be another financial crisis. That much is certain. …When the next crisis hits, the public will once again be called upon to step in and bail out Wall Street. We need to start seriously preparing an alternative response.

Hanna continues:

“Across Europe, more than 200 public and semi-public banks account for roughly a fifth of all bank assets. In Germany, the Sparkassen, a network of around 400 publicly owned municipal savings banks, “[came] through the crisis with barely a scratch,” according to the Economist, unlike some of the country’s larger private banks. The nearly 100-year-old Bank of North Dakota, which has around $7 billion in assets and a loan portfolio of $4.9 billion, is widely credited with helping the state get through the 2008 crisis with the lowest foreclosure and credit card default rates in the country, and with no bank failures for more than a decade. The bank made loans while private banks were freezing credit, all while continuing to contribute revenue to the state’s budget.”

[Read the full article]

 

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