In Colonial America, states issued their local currency so as to achieve independence from the banking and bankers of the Old World in Great Britain and Europe. Today, the Bank of North Dakota formed in 1919 is all that remains of the state-owned bank tradition.
In response to 2008’s Credit Crisis, U.S. taxpayers pumped $608 billion into the banking system (of which $367 billion has been repaid as of August 2013). An immense DC-Wall Street-Main Street public debate followed, along with passage of The Dodd-Frank Wall Street Reform And Consumer Protection Act (echoing reform measures passed after every previous domestic banking crisis), and the lobbyists on Capitol Hill carving the reforms into shards and loopholes without sufficient enforcement budget or the will to prosecute offenders at “too big to fail” banks.
Two options for public investment remain relatively unexplored:
- Reviving State-owned banks who, by reason of being government-owned, would be subject to higher public purpose accountability, conflict of interest and transparency rules
- Investing in a national program of banking services innovation and redesign, through smaller new banks and non-bank organizations
Urban Logic has surveyed global state-owned banking history, and posted it online at StateOwnedBanks.com (as a Wikimedia research site and to reduce spam, please create an account to access our work there). For an illustrated timeline of multiple banking crises, recessions and other developments in the U.S., and legislative responses to them, download this PDF, and because it is 600 years wide, zoom in 12 times (12x).