Banking

How Unelected Regulators Unleashed The Derivatives Monster

August 4, 2024 Ellen Brown, Scheer Post. Create! Banking, Debt, Finance and the Economy, Regulation

While the world is absorbed in the U.S. election drama, the derivatives time bomb continues to tick menacingly backstage. No one knows the actual size of the derivatives market, since a major portion of it is traded over-the-counter, hidden in off-balance-sheet special purpose vehicles. However, when Warren Buffet famously labeled derivatives “financial weapons of mass destruction” in 2002, its “notional value” was estimated at $56 trillion. Twenty years later, the Bank for International Settlements estimated that value at $610 trillion. And financial commentators have put it as high as $2.3 quadrillion or even $3.7 quadrillion, far exceeding global GDP, which was about $100 trillion in 2022.

The Supreme Court May Give Us Another 2008 Financial Crisis

April 4, 2024 Katya Schwenk, The Lever. Educate! 2008 Financial Crisis, Banking, Deregulation, Finance and the Economy, US Supreme Court

The United States Supreme Court will soon decide a case that could decimate consumer protections against abusive banking practices — potentially allowing banks to disregard state laws meant to prevent the kind of predatory lending that led to the 2008 financial crisis. Legal experts say that the case, Cantero v. Bank of America, could invalidate a host of state laws that protect people from predatory lending, junk fees, and other financial scams. The case is ostensibly about a New York statute that forces banks to pay interest to consumers on certain mortgage accounts — but big banks are fighting for the court to rule they are exempt from that law and many others in states across America.

Is American Banking Safe? You Might Not Like The Answer

December 6, 2023 Lynn Parramore, Scheer Post. Educate! Banking, Capitalism, Federal Reserve, Finance and the Economy, History, Regulation

As anybody who lived through the Global Financial Crisis of 2008 knows, banking can be hazardous. Failures can hit millions hard, wiping out life savings, tossing the economy into chaos, and messing with investments, spending, and overall growth. Capital requirements are supposed to be crucial buffers shielding banks from catastrophes, rooted in centuries of financial evolution from Alexander Hamilton up through the New Deal regulatory regime and modern international agreements like the Basel Accords. But current regulators’ efforts to raise the capital ratios of big banks to safe levels are strongly opposed by most financiers, sparking debates on finding a balance between stability and financial risk, all amid intense political pressures.

Wells Fargo Workers At Two Branches Move To Unionize

November 22, 2023 Niket Nishant and Reuters, Portside. Organize! Alaska, Banking, New Mexico, Unions, Wells Fargo, Worker Rights and Jobs

Wells Fargo employees at two of the bank’s branches filed for union elections on Monday, laying the groundwork for potential unionization in an industry that has largely been immune to such labor campaigns. In a petition to the National Labor Relations Board (NLRB), bankers and tellers at Wells Fargo branches in Albuquerque, New Mexico and Bethel, Alaska declared their intent to join the Communications Workers of America’s Wells Fargo Workers United (WFWU). Labor action in the United States has picked up pace this year, with unions confronting companies across industries like automotive, entertainment and aerospace.

Iraqis Protest Fall In Currency Value After US Bans More Private Banks

July 29, 2023 People's Dispatch. Resist! Banking, Iran, Iraq, Protests, US Imperialism, US Sanctions

On Wednesday, July 26, scores of Iraqis protested in front of the country’s central bank in the capital Baghdad following a massive fall in the value of the Iraqi dinar that is attributed to the recent US ban on 14 private banks. The market rate of the Iraqi dinar in exchange for one US dollar has climbed up to 1,570 from 1,470 in the last two days. The US Treasury Department and the Federal Reserve imposed the bans this month, accusing the banks of money laundering and transferring funds to Iran. The banks insist that they “have nothing to do with political tensions and are independent financial institutions” willing to face an audit to dispel any notion of wrongdoing or criminal activity.

How To Build A Bank To Scale Up Local Food Ecosystems

July 8, 2023 Oscar Perry Abello, Next City. Create! Banking, Food and Agriculture, Food Security, Local Economy

Charley Cummings had a vision of creating a new, sustainable, local food system. In 2013 he and his wife started their own company in Concord, New Hampshire, delivering grass-fed beef and pasture-raised pork and chicken purchased from farmers in the region and delivered directly to consumers. Along the way, he’s found farmers, food processors, distributors and consumers who are excited to be part of it. But the banks haven’t been interested. “There were farmers and also other types of food businesses, processors and things that wanted to scale alongside us, but seem to have trouble accessing the right type of capital,” says Cummings, who previously worked in commercial composting and management consulting.

Philadelphia Passes Public Banking Law

March 9, 2023 Ken Bank, Resilience. Create! Banking, Local Economy, Philadelphia, Public Banks

With all the obstacles to public banking, a small but significant step was taken in Philadelphia last March. The Philadelphia City Council, with one exception, voted unanimously to establish the Philadelphia Public Finance Authority. Its purpose is to provide credit lines for making loans to help small businesses unable to obtain regular loans from private financial institutions. Many of these enterprises are started by those without access to capital—usually working-class people and people of color. Although not a bank in the traditional sense (the Authority is unable to take deposits from private sources), it can utilize the city’s financial resources to facilitate loans that benefit the community and help stimulate the local economy.

What Will Happen When Banks Go Bust?

February 23, 2023 Ellen Brown, Scheer Post. Educate! Bail-Ins, Banking, Credit Unions, Finance and the Economy, Financial Crisis

Financial podcasts have been featuring ominous headlines lately along the lines of “Your Bank Can Legally Seize Your Money” and “Banks Can STEAL Your Money?! Here’s How!” The reference is to “bail-ins:” the provision under the 2010 Dodd-Frank Act allowing Systemically Important Financial Institutions (SIFIs, basically the biggest banks) to bail in or expropriate their creditors’ money in the event of insolvency. The problem is that depositors are classed as “creditors.” So how big is the risk to your deposit account? Part I of this two part article will review the bail-in issue.

Webinar: Making Money Work For The Common Good

February 17, 2023 Women's International League for Peace and Freedom, Popular Resistance. Create! Banking, Money, Peace, Sustainability

For over three centuries, banks have been consolidating their power by extracting interest from people, businesses, governments and the planet. This power helps to explain why politicians and governments bend to their will. Mainstream economists treat money as a neutral medium of exchange and never consider its origin and purpose. Is it meant to serve the people, or to serve the interests of the monied elite alone? Exploring that question helps explain why there’s always plenty of money for military research and development and none for protecting pollinators…and always enough to finance luxury condos instead of affordable dwellings.

A Mobile Bank On Wheels Reaches Bronx Residents Where They Are

January 25, 2023 Emily Nonko, Next City. Create! Banking, Finance and the Economy, New York City (NYC), The Bronx

The Bronx, New York City, New York - At the height of the pandemic, bank after bank began shuttering across the Bronx — between 2019 and 2021, seven banks closed 17 branches, with more than half happening in 2020, according to The Association for Neighborhood & Housing Development. The closures exacerbated an existing problem: prior to COVID-19, the Bronx had the fewest bank branches and the most check cashers and pawnshops per household in the state, possibly the country. Community organizers in the Bronx had spoken out about the closures since 2019. But they weren’t making headway with the banks, who claimed they lost money on those branches, or banking regulators, as both state and federal agencies claimed they lacked enforcement power to stop the closures. So those same organizers found a solution to address the problem themselves: a mobile banking branch, free to travel the 42-square-mile borough.

How To Green Our Parched Farmlands And Finance Critical Infrastructure

September 3, 2022 Ellen Brown, Scheer Post. Create! Banking, Environment, Finance and the Economy, Infrastructure

Congress has passed two major infrastructure bills in the last year, but imminent needs in infrastructure funding remain. The 2021 Bipartisan Infrastructure Law chiefly focused on conventional highway programs, and the Inflation Reduction Act of 2022 (IRA) mainly centered on energy security and combating climate change. According to the American Society of Civil Engineers (ASCE), over $2 trillion in much-needed infrastructure is still unfunded, including projects to address drought, affordable housing, high-speed rail, and power transmission lines. By 2039, per the ASCE, continued underinvestment at current rates will cost $10 trillion in cumulative lost GDP, more than 3 million jobs in that year, and $2.24 trillion in exports over the next 20 years.

How The Ghana Susu System Helps The African Diaspora

August 25, 2022 Amidu Mutaru, Grassroots Economic Organizing. Create! Banking, Canada, Economic Security, Solidarity Economy

I was born in Nalerigu village in northeastern Ghana. For most of my life, I watched as my mother, Mariama, worked as a trader and used Susu to meet her financial needs. My mother used money from susu to pay my school fees and to carry out her trade business. Ghana’s Susu system is widely used by the people. Susu means “small small” in the Twi language (Amankwah et al. 2019:2). I only knew about Susu as a banking tradition in Ghana. I did not know that I would come to learn of its activity in a ‘developed’ country when I moved to Toronto, Canada to carry out my doctoral studies in anthropology. In the Spring 2022 I was hired as a research assistant to work on a project to understand rotating savings and credit associations – known as ROSCAs.

Public Banking Learning Circle

March 25, 2022 An Economy of Our Own. Create! Banking, Finance and the Economy, Public Banking

Public Banking can save the planet, close the equity gap, address systemic racism, stop funding weapons and global wars, and level the playing field for women and families. Learn more in the first series of our special and accessible workshops for women—and become a skilled advocate for economic change in your community! This is an entirely digital, small-group series of six sessions offered at a sliding scale. We'll kick off our first session on Friday, April 8th at 8pm eastern/5pm pacific. Then we'll meet together five more Fridays, at the same time (8pm eastern/5pm pacific), on April 29th, May 20th, June 10th, July 1st and July 22nd.All registration fees are donations that will fuel our work to make this information widely accessible.

Unimpressed With Post Office Banking Trial, Backers Eye New Initiative

March 2, 2022 Caitlin Reilly, Roll Call. Create! Banking, Finance and the Economy, Postal Banking, Postal Service

As lawmakers work on finishing fiscal 2022 appropriations, they’ll have to decide whether to keep a House spending provision that would allow some post offices to offer more financial services. Coming in the wake of a largely ignored U.S. Postal Service test of a check-cashing service, a new initiative could test whether the Postal Service can attract millions of Americans who now lack banking services, serve areas largely vacated by banks and make money by doing so. Those tests depend on the Senate going along with the $6 million for a pilot project in the House’s fiscal 2022 Financial Services appropriations bill. Lawmakers are trying to finish the appropriations work before the current continuing resolution expires on March 11.

Postal Banking Is Finally A Reality In (Some Of) The United States

October 19, 2021 Donald Cohen, In These Times. Create! Banking, Finance and the Economy, Postal Banking

The crisis[Covid-19 pandemic] has wreaked economic havoc on working Americans. But U.S. billionaires have gotten 62 percent richer during the pandemic, while over 86 million Americans lost jobs, some 3 million households now report concerns of imminent eviction, and essential workers — particularly Latino, Indigenous and Black workers — continue to die from Covid-19 at disproportionate rates.

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