(Photo: Richard Peterson/flickr/cc)
The Scottish Government has stated its intention to launch a National Investment bank. Influenced by a PhD thesis written by Gemma Bone Dodds, titled Banking for the Common Good, here are the main justifications for the decision:
- When the Royal Bank of Scotland collapsed in 2008 costing the UK economy £7.4 trillion, it made clear that the current system is unstable and not fit for purpose.
- Other successful countries such as Germany have more sustainable and socially just banking systems so it can be done
- In the light of the RBS collapse, there is clearly a need to move away from a concentrated, profit-driven system to an ‘ecosystem of institutions structurally designed to work for the common good’.
- The above would lead to not-for-profit regional ‘People’s Banks’ which would invest in local communities and businesses.
- They would also invest in long-term projects which private banks won’t do.
- It’s estimated that with an initial investment from the Scottish Government of only £225 million, £3.4 billion could be leveraged in the first year alone.
That looks like a compelling case to me.
Footnote: It’s good to see PhD theses getting a good name after the use of one in 2003 to inform the ‘dodgy dossier’ for the Iraq War.