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Items considered 1. Separation of investment banking from retail (narrow) banking 2. National public bank 3. State banking 4. Government low interest loans for infrastructure 5. Ethical banking and accountability 6. Banking competition 7. Entrepreneurial bank 8. Financial speculation and bank solvency 9. Monetary reform10. Property debt11. A modern debt Jubilee


No 1

Separation of investment banking from retail (narrow) banking

Adequately regulating the financial sector to ensure full demarcation of merchant and investment banking from retail banking.

More generally, the megabanks (“too big to be allowed to fail”) need to be broken up, in terms of their complexity and size.

The current giant investment banks were originally not banks at all -- they were organisations which handled securities. Relaxed regulatory arrangements allowed them to move into retail banking and to exploit the privilege of being able to create credit money to their commercial advantage.


No 2

National public bank

Creating a national Australian public bank, along the lines of the original Commonwealth Bank, to compete with the other commercial banks in providing retail banking facilities for the public and business.

This bank to also provide funding for selected socially and environmentally friendly ventures not regarded as sufficiently profitable for the private commercial banks.


No 3

State banking

Empowerment of local and state governments to divert their funds from the largest private banks to alternative banking institutions large enough to take the deposits.

An obvious solution is for states to:

re-establish their own public banks

capitalised with their rainy day funds, funded with their own revenues as a deposit base

to be used for supporting the needs of local businesses and industries

examples of community state banks around the world
Examples of Community & State Banks around the World








Government low interest loans for infrastructure

  • Creation of a government facility to allow for:
  • Provision of low or zero interest loans, from money created by the central bank (in Australia, the Reserve Bank of Australia)
  • supporting environmental & infrastructure projects, particularly those which can generate a return on the money invested. Such a scheme could be directed through public banks
  • This type of proposal was advocated and lobbied in the U.S. during the past two decades by Mr Ken Bohnsack, and his movement was known as ‘Sovereignty’.

No 4


Ethical banking and accountability

Establishment of ethical standards, as well

as social and environmental accountability,

for all banking and investment practices.

Ethics is not just about detecting, revealing

and prosecuting fraud and corruption, it's

about choosing and implementing an ethical

approach, supported by adequate regulation.

No 5

Having ethically organised banking institutions in

competition with other institutions will encourage

ethical standards and practices across the sector –

e.g. the Triodos Bank in the Holland only lends for

ethically viable projects.


The LIBOR banking scandal: “This dwarfs by orders of magnitude any financial scam in the history of markets”Andrew Lo, Professor of Finance, MIT


No 6

Banking competition

Enhancing banking competition by strengthening incentives for establishing and developing cooperative banking institutions, including community banks, credit unions and building societies.

keeping banks
Keeping banks



No 7

Entrepreneurial bank

Creation of a special category of banking institution - an entrepreneurial (innovation) bank - able to provide finance for bridging the gap between

(a) research and development

(b) project capitalisation

in order to make the items developed market ready.


No 8

Financial speculation and bank solvency

Developing strategies for controlling the tendency of commercial banks to create too much debt, which leads ultimately to asset bubbles, market crashes, and a perceived need to bail-out insolvent banks.

In particular, leveraged speculation on the prices of pre-existing assets needs to be much less than it has been in recent times. Items 9 and 10 provide some mechanisms which would contribute to effecting such a reduction.


Monetary reform

Devising and operating a financial system in

which all money used by the public is created

by the Reserve Bank of Australia, rather than

the current system where most of our money

supply is bank credit money created by retail


Several models for ensuring that all money in use will

exist exclusively as a form of state fiat money have

been worked out. The first such model was the 1930s

Chicago plan, which had the support of some of the

most distinguished economists of that era. Positive

benefits include a reduction in leveraged speculation,

an end to the necessity to have reserves operating in

parallel with deposits, and a possible end to banks’

time (term) deposits. A suitable alternative to time

deposits would be government infrastructure bonds.

No 9


No 10

  • Property debt - Prof Steve Keen’s proposals:
  • Lending for real estate and other property to
  • be based on the rental income (actual or imputed) of the property being purchased.
  • 2. The debt that can be secured against a
  • property to be limited to (at most) ten times
  • its annual rental income.

No 11

A modern debt Jubilee

Implementing a program of debt forgiveness (a debt Jubilee), as an alternative to 10-15 years of slow repayments and bankruptcies.

The process to involve directing newly created money to bank accounts of the public, and requiring that the first use of this money must be to pay off existing debt.

The debt jubilee may be funded in the same way that

quantitative easing for the financial sector has been

funded - by central bank money creation, and for the

same reason – to compensate those holding assets

whose real value has fallen (e.g. in the case of the

public, property prices), owing to a collapsing asset

bubble. This would counter deflationary pressures.

New loans from the financial sector would be directed

at purchasing other more stable types of assets.