"European Union membership not helpful to formation of Public Bank in Wales" says Ellen Brown of Public Banking Institute at meeting in Cardiff on 24th February 2016 reports Alan Roderick Jones
Ellen Brown gave a very informative lecture on "A Public Bank for Wales and The World Economic Situation" in Cardiff on the 24th February organised by Arian Cymru.
The World Situation
She informed us that 25% of the worlds banks are public banks and not private banks, that it used to be 40% of world banks were public before the recent era of neoliberal privatisations.
Given that banks can create credit and hence money ,they have unique role in society which should be for the public good however private banks have subverted that public good to their own private profit and we need to reverse this neo liberal trend.
We are now in the 21st century debt era of "Bail ins" and not just government bailouts for banks has in the past but depositor "Bail in's".
In 2011 the G20 facilitated "Bail ins" and the "Bail in" is now law in the Eurozone.
We saw a bail in at work in the Cypriot financial crisis and it is a very concerning new development for bank depositors.
Article 123 of The Lisbon Treaty of the EU forbids direct borrowing from the national central bank by member governments and this makes borrowing more expensive for projects like infrastructure than it should be.
In the past when borrowing was from the national bank projects were cheaper, now that the government borrows from the private banks infrastructure projects have become twice as expensive.
Ellen Brown called for a People's Quantitive Easing has the existing QE was only benefiting the banks and stock and commodity markets and not the people.
She mentioned the debate in the European Parliament for a People's QE and the notion of helicoptering funds to people's bank accounts to solve the people's debt problem.
Ellen Brown was of the view that a No vote in Wales to the European Union would provide best framework to advance public banking in Wales - she was especially concerned about the secret TTIP negotiations of The European Union which subordinates nations to corporations..
There was a discussion about a Welsh Public Bank on the model of the Bank of North Dakota the only public bank in the United States.
The Bank of North Dakota was formed from North Dakota's State and local government funds being deposited in it own bank. North Dakota has a population of 640,000 people.
Ian Jenkins of Arian Cymru made the point that one of the obstacles to the creation of such a public bank in Wales is that the UK local authorities are obliged by law to deposit their money only with the big five private banks.
It was also noted that the private banks have sold risky investments to local authorities.
Therefore there would be a requirement to change the law in UK to make local authorities deposit their funds with a Public Bank if one were formed in Wales..
Rhun ap Iorwerth Plaid Cymru AM at the meeting said Plaid Cymru supported a public bank for Wales and there were discussions around question of an infrastructure bank for Wales.
Alan Jones of Yr Aflonyddwch Mawr said we should be clear about what terms we used as Bank of England can be seen as Nationalised Public Bank - would it not be better to talk about social ownership of a bank and call it a Community Bank of Wales, something which could start small in a Welsh town or county and grow as it overcame regulatory obstacles to become a genuine Welsh National Community Bank.
It was mentioned by an audience member that Hampshire had a community bank and we should look at that development .
The meeting thanked Ellen Brown for her informative lecture and hoped next time she visited Wales we would have a Welsh Public Bank.
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