Q: Why are some banks opposed to public banking?


The banks that oppose public banking tend to be large, multinational institutions that provide banking services to city and state governments and invest their funds in out of state projects, such as the Keystone XL pipeline and the tar sands in Canada. Government deposits are a cheap source of liquidity for these banks and help to bolster their credit ratings.

For local community banks, on the other hand, the high collateralization requirements for government deposits make them of little use; and partnering with a public bank has many benefits. This benefit is confirmed by the fact that the North Dakota Bankers Association endorses the Bank of North Dakota.


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