Carne Ross writes: It has been clear for some time that the conduct of the banking and financial industry is one very important cause of the 2008 credit crunch. Moreover, for-profit banks by and large fail to deliver services to the poor, deepening poor people’s marginalization from the mainstream economy. The banks relentless pursuit of profit, an intrinsic feature of the industry (as of the broader economy), continues to expose all of us to the risk of another banking crisis which would repeat the enormous harm done last time, above all to the world’s poorest. Sadly, it’s unrealistic to expect Washington to do much to curb the industry, given the banks’ enormous lobbying sway and privileged access to senior officials, regardless which party is in power.
It’s no surprise then that the banks have been an important focus of discussion in the Occupy Wall Street movement. And a new approach to banking may become one of the important ways that Occupy moves forward and starts producing material change.
One evening in Zuccotti Park, I somewhat rashly, and without much forethought, stood up and announced that I wanted to set up a working group to explore alternative systems of banking. I did not have a clear plan but felt that we had to get to the heart of the problem. If we could change banking and make it embody the values of Occupy—equality, transparency, democracy—we might not only change the financial industry for the better, but also change the very nature of the economy—and thus society itself.
Other members of the group share this ambition. Those who have joined the group represent an extraordinary and eclectic mix. There are army vets and unemployed students, but also a large number of financial experts: former derivative traders, SEC regulators, bankers, financial analysts and bloggers and even a professor of financial law. We have no shortage of expertise, and no shortage of determination either.
Over the last several weeks, we have been examining what legislative changes are needed to reform the banking sector: some day soon there may be Occupy-originated proposals and draft legislation, for instance to amend the so-called “Volcker Rule”. One group has split off to explore and design the creation of an ideal bank that would put into practice the values of Occupy. What would this look like? [Continue reading…]