Public Banking Institute

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"The Public Banking Institute (PBI) is a non-partisan think-tank, research and advisory organization dedicated to exploring and disseminating information on the potential utility of publicly-owned banks, and to facilitate their implementation. PBI was formed in 2011 as an educational non-profit organization by a group of citizens including past and present community and civic leaders, businesspeople, educators, political economists, writers, and banking and other professionals. The group shares a concern over the destabilizing actions of a private banking industry that, through its corporate business model, has precipitated the economic imbalances now witnessed across the US economy.

PBI seeks to explore the possibilities for, and to facilitate the implementation of, public banking at all levels -- local, regional, state, national, and international. Its approach is informed by the historic role of public banks in fostering access to cheap and readily available credit for governments, businesses, and individuals, particularly with respect to creating productive capacity." (


Ellen Brown interviewed by Shareable's Robert Raymond:

* At this point, what are some of the biggest barriers that Public Banking Institute is facing as a movement?

The system is much more geared towards private banks and it’s slowing us up from getting municipal public banks established. In California, for example, eight different public banking advocacy groups have formed a coalition called the California Public Banking Alliance (CPBA) which has been pushing for a bill that would carve out a special charter for public banking. The bill, AB 857, just passed in the California State Assembly and most of the state senate committees. It would make it much easier for publicly owned banks to be created, because there’s currently no public banking charter available in the state.

Another issue on the national level is that currently new [de novo] banks are supposed to have FDIC insurance, but FDIC insurance only covers $250,000 per depositor and — if we’re talking about a public bank which only takes municipal bank deposits, for example like in North Dakota — you’re going to have far more than $250,000 per depositor [i.e. the state or city] to insure. So FDIC insurance wouldn’t do the state or city much good [since a single depositor would have millions, or in the case of the state of California billions, to deposit]. They would have to pay for the insurance and it would put them under the supervision of the FDIC, which chiefly underwrites and serves the biggest Wall Street banks. The Bank of North Dakota is not a member of the FDIC and was grandfathered in so they aren’t required to be a member, but the new rules for forming a de novo bank are that you must have FDIC insurance. One thing that we want to do is carve out an exception for a public bank. The bank would need some sort of collateralization to protect the deposits, but FDIC insurance isn’t the most functional solution.

So now, by law, all of the state’s revenues are deposited in the Bank of North Dakota, which gives it a massive deposit base. They’ve built up their capital over many years and now have a $7 billion bank, which is a lot considering the population is only 760,000.

There was an article in The Wall Street Journal in 2014 that said the Bank of North Dakota was more profitable than Goldman Sachs and JP Morgan Chase. The question is, how did they do that? Well, they just have very low costs. They cut out the middleman — they don’t have shareholders bleeding their profits out, no $20 million CEOs, so they’re able to use their profit to make below-market loans into the local community.

North Dakota was the only state that had their own bank and, after 2008, it was the only state that escaped the credit crisis. It never went in the red. It had the lowest unemployment rate in the country, the lowest default rate, the lowest foreclosure rate, the most local banks per capita — six times as many banks as other states — and actually didn’t lose any banks to the crisis.

* How should the movement evolve to be successful?

Massive unrest and revolutionary fervor are happening globally, but activist groups tend to be limited to their own circumscribed silos. If we could manage to bring all those groups together under one umbrella, we could be a seriously effective force. Public banking advocates feel that public banking could be such a unifying force. Ideally, we could form a political party or at least a political action group.

My own sense, though, is that to make significant headway, we really need to get the federal government and the Federal Reserve involved. A continual question raised by opponents is whether cities and states will be liable if their public banks wind up with more bad loans than they have capital. We need to do as China does, and support our local public banks with the deep pocket of the central bank. Rather than putting either the insolvent enterprises or the insolvent banks into bankruptcy, China just writes off the bad debts. Another alternative would be to move bad debts onto the books of the central bank, just as the toxic mortgage-backed securities of Wall Street banks were bought by the Fed after the 2008 crisis." (

More information

The Book

"What is your vision of the future — what would life be like if every city had their own bank?

I envision a national public banking system in which banks [are] the local arms of a nationalized central bank; one that [is] transparent and accountable to the public. I elaborate on this in my latest book, “Banking on the People: Democratizing Money in the Digital Age.”

With a national public banking system, governments, local businesses and individuals could get below-market loans; bank profits could return to federal and local governments for public needs; the economy would be stimulated; jobs would be created; infrastructure and social programs could be funded; corruption and the financialization of the economy could be minimized; and income equality could return." (