Let’s get Scotland’s banking right

Stephen Richard — Tue, 14 Sep 2021 08:33:51 +0000

Primary Author or Creator

Common Weal

Stephen Richard Tue, 09/14/2021 - 09:33

Alternative Published Date

2020

Category

Banking

Type of Resource

Video

Fast Facts

Banking has lost its way, forgetting that it should be serving its customers and not exploiting them. But a mutually-owned People’s Bank can change this.

Video: 2:09 minutes

More details

Banking has lost its way, forgetting that it should be serving its customers and not exploiting them. But it’s not just the way banks operate, it’s whether people can even get access to proper banking with more and more branches closing. Common Weal believes both can be fixed with a mutually-owned People’s Bank. How this would be done is explained in the report Better Banking which proposes using an existing ‘bank in a box’ model. This is a preprepared model for a banking network which would initially be set up by government but would then be passed into the ownership of its customers. It has a full business plan and it would be able to open branches (or mini-branches via a ‘banking pod’ model) in any community where enough people joined the bank. It is particularly designed not to make profit from customers and to emphasise long-term, trusting relationships. These are particularly important to small businesses.

The other big banking policy Common Weal published was for a Scottish National Investment Bank – and this has already happened. It was conceived of as a way of driving investment into big Scottish businesses and other projects with a public-good focus. It would emphasise mission-orientated investment to achieve social and environmental goals as well as economic ones and would specialise in providing the kind of long-term, patient investment based on trust that the commercial banking sector has not provided. We published two reports, the first making the case for the bank and the second setting out the technical detail of how that would work.

We’ve done a number of other pieces of work on banks and banking. There is more information on our work on a central bank for an independent Scotland in the Big Idea ‘Getting Scottish Independence Right’. But we also published a proposal for how Scotland could set up its own digital currency under independence. We also produced an important report on how Scotland could set up a publicly owned payment service (like the way you pay for things at tills using cards or your phone) which would both be reliable and safe (and not harvest your data) and would also create income to help fund public services.

Video is 2:09 minutes

Resource Address (URL)

https://commonweal.scot/big-ideas/lets-get-scotlands-banking-right/

Keywords

Bank services

Scottish National Investment Bank

Currency

Language English

Better Banking – A Public-Good Banking Network For Scotland

Stephen Richard — Tue, 17 Aug 2021 08:10:59 +0000

Better Banking – A Public-Good Banking Network For Scotland

Primary Author or Creator

Common Weal

Stephen Richard Tue, 08/17/2021 - 09:10

Date Published

Sun, 01/20/2019 - 12:00

Category

How will citizenship be determined?

Type of Resource

Policy Paper

Fast Facts

In Scotland particularly, bank branches have been closing at a rapid rate leaving much of the country without reliable banking services.

A model which can enable communities to found their own local bank branch providing basic but essential services free of the risky “casino banking” of the private sector is presented.

More details

The UK has one of the least diverse retail banking systems in Europe with a disproportionately large market share for private banks and very few cooperative, mutual or public options compared with other countries. Private banks (which have no public benefit obligations to customers or communities) have been closing branches at a rapid rate, leaving much of Scotland without reliable banking services. They have also engaged in extremely risky behaviour which has put the wider economy at risk.

Having a reliable public or mutual banking sector would mean branches being returned to communities, helping to support small business development and local economies, balancing the over all risk to the economy and helping to address issues of poverty which relate to lack of banking services. There is now an off-the-shelf ‘bank in a box’ model which can enable this to happen quickly. The Community Savings Bank Association has produced a package which enables a mutual bank to be set up very quickly (as little as 18 months from start to launch). The total start-up costs of the bank would be in the order of £20 million; from there scaling and the number of branches would be dependent on the number of customers.

― The bank needs to be set up by a team with the expertise and passion to create a truly mutual bank that will work for the people, the communities, the businesses and the environment of Scotland. The initial project team (who should not, as a rule, be predominantly bankers themselves) should commit to a process of meaningful stakeholder engagement and design right across the country to ensure that the bank is created with and for the people of Scotland. Common Weal believes it should be established initially as a public project and the founding team should be supported and work in close alignment with the Scottish National Investment Bank team, who should assist in the delivery and capitalisation of the bank in association with local authorities.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2019/09/Better-Banking.pdf

Keywords

Bank services

Community banks

Private banks

Language English