What is a Public Bank?
Answer: A Public Bank is a bank owned by a national, state, or local government in which all of its funds, taxes, and revenues are deposited. It is mandated to serve a public mission that reflects the values and needs of the public it represents.
What is the most basic difference between a public and private bank?
Answer: The most fundamental difference is that a public bank has a mission to serve the public interest while private banks are owned by shareholders and their primary goal is to maximize profit for their shareholders, which can work against the public interest.
Why is Public Banking important now?
Answer: The 2020 Colorado budget is $12.6 billion and the projected deficit is at least $3 billion. This means that either the difference is made up by the federal government, which is highly improbable, or that vital services to the people of Colorado must be substantially curtailed. Public banks in Colorado could avoid that disastrous effect assuming they are adequately funded. Rocky Mountain Public Banking Institute has conducted informal surveys of needs in Colorado indicating that cities, counties, the state, and educational systems are strapped for funds, face cuts of services, and in some cases a request to sell off valuable assets. A public bank could enable local governments to make much more money available by loans for urgent needs such as affordable housing, clean energy, infrastructure (roads, bridges, parks), health care, education, student loans, environmental cleanup, sustainable agriculture, broadband, and independent media, according to the community’s needs, creating a much larger tax base to restore the lost funds, and some of the banks’ income could be paid into the government’s general fund. For more information, please see this blog post discussing how Public Banks could help solve Colorado’s financial crisis.
How will public banks help during the current pandemic?
Answer: Public banks could make loans to greatly increase the purchase of necessary COVID-19 testing equipment and all necessary protective gear for first responders such as doctors, nurses, and EMTs, as well as to make loans to facilitate the use of the most effective means found to treat and cure the infection.
Secondly, to overcome the financial crisis caused by COVID-19, public banks could lend much more money to state and local governments to build affordable housing and infrastructure, and can lend money to restore small businesses, to refinance student loans, and to convert from fossil fuels to clean energy, including job retraining. For more information, please see this blog post that discusses how German Public Banks have helped post-Covid-19 recovery.
More Information on the Benefits of Public Banking
Are public banks legal under the Colorado constitution?
How could a city or county establish a public bank?
Would a public bank be subject to the limits on revenue and expenditures imposed by the TABOR Amendment?
What are some common objections to Public Banking?
How do we know a public bank won’t be improperly run by politicians and insiders for their own benefit?
Where does the money for a public bank come from?