Banco Popular. Photo courtesy Thomas Marois

Photo caption: Photo courtesy Thomas Marois.

Public banking is a way to “democratize” our money, but how can we ensure that the bank is run democratically? Costa Rica has shown the way with its broadly democratic, worker-owned Banco Popular, described in a recent article in Open Democracy by University of London public bank scholar Thomas Marois. Designated Bank of the Year 2018 in Costa Rica by LatinFinance, Banco Popular is governed by a 290-member Workers’ Assembly comprised of representatives from across ten social and economic sectors, 50 percent of whom are women. The bank just announced the availability of 140 billion colones ($240 million) in lower-interest loans for micro, small and medium companies and for housing for families who do not have access to credit from traditional commercial banks.

Marois’ new research also demonstrates that there are nearly 700 public banks around the world that have combined assets nearing $38 trillion — about 48 percent of global GDP. That means 20 percent of all bank assets are publicly owned and controlled — much greater financial capacity than commonly believed. His research contradicts the standard neoliberal narrative that there is no alternative to using private finance for climate finance and other community needs.

In the article, Marois warns of adopting solutions offered by the current global financiers to address the daunting expenditures said to be needed to address climate change:

“If we go blindly down the current UN-authenticated climate finance path, existing public banking capacity is at serious risk of being captured by private financial interests. Should this occur, private investors’ profit- and growth-driven imperatives will undermine any hope of a just and green transformation in the public interest. Moreover, public finance will only feed the very same private financiers that contributed to the climate finance crisis in the first place! Only in a neoliberal world does this make for coherent policy-making. …

“In a financialized world dominated by a powerful, unaccountable, and self-interested financial class, there will be no just or green transformation without first reclaiming financial capacity in the public, not private, interest.”

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