Financing Changes For A New Era In Banking

The time is indeed ripe for the growth of banks with a conscience as financial crises are leading to an upsurge in public indignation in numerous countries. Further, there is rising scientific realization of not just the financial but the ecological unsustainability of the dominant economic paradigm.

Klein opened with what has become the Occupy Wall Street signature message to the financial sector — “We will not pay for your crisis” — and went on to maintain that exploitation of economic crises are used to push through the “dream policies” of a small elite. Namely, policies meant to accomplish things such as cutting social safety nets that make people more vulnerable and dependent on debt. However, she said, blaming the usual scapegoats (like unions) for instituting such policies is no longer working as regular people now understand that the “root cause of the crisis was greed”.

NEF’s Wallis highlighted the need for grand scale recognition of the fact that the economy is but a subset of our global ecosystem and that humanity must begin to acknowledge the planet’s carrying capacity (and the fact that we have, for decades, been exceeding it).

“We have gone from trickle-down economics to Hoover up,” he quipped. (And even United States President Barak Obama recently slammed trickle-down as bad enough.)

Going on to speak of the “Four Horsemen” of economics — a set of systemic, interlinked problems that leave the situation unsustainable, unfair, unstable, and making us unhappy — Wallis insisted that change is doable, even if the transformation will be tricky to pull off. (Incidentally, a “leading thinkers”-filled film, entitled Four Horsemen, has just been launched in the UK and apparently also offers a message of hope.)

Banks are providing a crucial public service, Wallis insisted. “They behave as if they are the master but we need to make them our servant,” he said, in that they need to become “stable, fair, and socially useful”.

Vancity’s Vroom agreed, saying governments began to guarantee banks’ liability because originally, capital was supposed to be put to the service of the people and the planet. Implying that, since this is for the most part no longer the case, financial institutions have taken unfair advantage.

Further, Klein opined, bank bailouts are just giving more privilege to banks because banking in itself “is a privilege — creating credit is a privilege”.

So while public discussion rages on about how to tackle the challenge of regulating big banks and bank bailouts, this subset of banks “pursuing business models with sustainable, community-focused finance at their core”, have proven that the based-on-values model is a strong one.

Giving people a viable alternative to mainstream banks is the first step in what Klein described as a two-pronged strategy to transform the global financial picture so as to allow us to finance the change that puts focus back on the real economy and fosters ecological sustainability and social equity.

However, in response to Hanomansing’s final request to panelists to share their “call to action” messages, Klein insisted that “Moving your money is not enough!” She said that it is important for people to also “join a movement”. Ostensibly one that is working to ensure, as she described earlier in the discussion, that big banks are not “let off the hook” in that we should still be “breaking them up” and nationalizing them.

Wallis agreed, saying that it is time that the condescension of the reigning financial elite impels us to “play with their toys“, building these new very viable alternatives and spurring momentum in this alternate direction.

You can read about crowdfunding here. You can read up on high-risk consumer debt in this article. Additionally, you can read about achieving financial freedom in this post.