Why Public Banks Outperform Private Banks

Public banks in North Dakota, Germany and Switzerland have been shown to outperform their private counterparts. Under the TPP and TTIP, however, publicly-owned banks on both sides of the oceans might wind up getting sued for unfair competition because they have advantages not available to private banks.

The BND turns a tidy profit year after year because it has substantially lower costs and risks then private commercial banks. It has no exorbitantly-paid executives; pays no bonuses, fees, or commissions; has no private shareholders; and has low borrowing costs.

Why Public Banks Outperform Private Banks

I have used credit unions my entire life with little complaint.

Banking should be a service not a profit center in my estimation and the last 30 years have shown us why which the endless boom and bust - finance always making a buck - cycle.

You will note that this article mentions Germany and Switzerland as to stalwarts of public banking and might see the connection between this fact and their stable economies.

Lest there be any doubt about the greater profitability of the public banking model, however, this conclusion was confirmed in January 2015 in a report by the Savings Banks Foundation for International Cooperation (SBFIC) (the Sparkassenstiftung für internationale Kooperation), a non-profit organization founded by the the Sparkassen Finance Group (Sparkassen-Finanzgruppe) in Germany. The SBFIC was formed in 1992 to make the experience of the German Sparkassen – municipally-owned savings banks – accessible in other countries.

And the main purpose of publically owned banks is to be of service to individuals and small to medium businesses - sectors that are sorely underserved (and over exploited) by private banking.

The Sparkassen were instituted in the late 18th century as nonprofit organizations to aid the poor. The intent was to help people with low incomes save small sums of money, and to support business start-ups. Today, about half the total assets of the German banking system are in the public sector. (Another substantial chunk is in cooperative savings banks.) Local public banks are key tools of German industrial policy, specializing in loans to the Mittelstand, the small-to-medium size businesses that are at the core of that country’s export engine. The savings banks operate a network of over 15,600 branches and offices and employ over 250,000 people, and they have a strong record of investing wisely in local businesses.

There are charts in the article: Net profit after taxes as a percentage of average total assets, Return on Capital after taxes as a percentage and Taxes Income nd Earnings cumulative 2000 to 2013 in Millions of Euro - showing the benefit to local, state and federal entities.

These are banks that don't require bailouts as they don't indulge in speculative ventures.

This is a model to follow - North Dakota's state owned bank is doing well for the people of North Dakota.

Again the article can be found here: ellenbrown.com...

A credit union is a PUBLIC bank.

Banking should be a service not a profit center in my estimation and the last 30 years have shown us why which the endless boom and bust - finance always making a buck - cycle.

LOl profit is the rason d'etre of capitialism.

Nothing in this life is free.

Nothing in this life will ever be free.

Especially so when it comes to money.

And those who want it for nothing.

But then again money is nothing.

The banks get from the central banks. That just pull it out of their snips.

And charge the bank interest. Who charges you interest. Who in turn uses that PROFIT to turn around, and let other people get stuff they want.

Private banks is the place to be.

Better rates, and better service than public.

Because EVERY ONE paying attention nows Private beats, anything Public.

From PRIVATE health care, to schools, and hospitals, and BANKING.

Hell even the Federal Reserve, and other central banks are essentially PRIVATE ventures.

a reply to: FyreByrd Interesting that they talk about Switzerland and Germany, and then out of left field NORTH DAKOTA, lol. Brought up a great point about Swiss and German public banking and (more) stable economies, however, in this era with the currency wars going on even they are having trouble: economist-explains

UBS Warning

Great post - thanks for sharing!

a reply to: neo96

There's a few things in life that are free actually. In fact most the things worth actually caring about are fully obtainable free of charge.

Capitalism has and always will, and will continue to be, a system for the weak minded. It's a shame we're all forced onto the wheel. The only people who truly compete in a capitalist system are those who can better forge their credentials to be in a specific position. Or those who can sustainably lie, over and over again. The people who make capitalism work, the welders and the plumbers, the workmen and the dockers - those with a trade - are systematically reduced to a 'drone' like status of assumed continual output, whilst the lesser pursuit of changing money and counting stacks is glamorised to such an extent you end up with what we have now. A huge shortfall of skilled workers, everyone else has wasted their time with an economics degree that got them a job in Tesco. Capitalisms pride and joy - the unskilled voter bot - just intelligent enough to press a vote button however not quite intelligent enough to know why. That is capitalisms biggest failing. It assumes continual growth whilst at the same time punishing those who'd make it happen.

Banks are a reflection of the people who use them. Fat, bloated, overly complex and utterly artificial. Saddest thing I ever did see was a salesman giving a mortgage to me. A salesman, working in the very company I have trusted not to 'speculate'.

I agree totally with your assessment of money creation and denotation. It's ALWAYS meant nothing, and that's the biggest secret isn't it. We fight over a perception based myth. Utterly astounding. The truly scary thing for those who see it is the old adage "what has been seen cannot be unseen". The fact that people must pay for water and gas, as well as electricity should concern any truly humanely minded person.

All the best.

There are many things where people work hard at gaining money and investment for what they work within. All of the celebrity physicists want more money put into physics. They will also say that if they just had more money the world would be better. But they ignore the fact that physics has recently had more downside than good and that it created nuclear power which through nuclear accidents caused the radiation level of the world to increase and is the real cause for rising cancer levels. The nuclear bomb has caused atrocities.
Also as an investment it is in no ones interest to say how much every pound you spend you get back, or when this is done they completely ignore the input economically of others in their calculations. They will say that if a country has better science that the economy will do well, but is this really the case when they take the research paid for by their own countries and publish papers for everyone to read, and then educate the students from other countries and if the country is poor it may have been paid for my a richer country.
I am not anti science I am pro science but it is easy to ignore the other issues concerned. Also some people have concerned that some sciences have become less productive and that maybe the reason for the way it is done. Maybe instead of sending large amounts to a smaller number of experts in a science they should be shortening the education system in these subjects and so rely upon a larger number of people, with less funding.
I just wonder what is design had as much money spent on it as science: which always gets a large amount of money spent on it. What if people put the same amount of money into publishing would it make more money. It also isn't difficult to imagine that there could be a world full of advanced science that no one would want to live in due to the downside such as short life span due to radiation, and we cannot assume that science will solve this because radiation only reduces in level very slowly.
Yes we need to stop the human race being destroyed by a meteorite. But more money cannot always be the answer. Maybe the problem is the people, because in times gone by the education system was much shorter and the world was more productive: was this down to people power? More people more people working on the problems. The world needs be training people to do things in science to the highest level in a few years or less en mass.

And this has to do with public banking ... how?

a reply to: FamCore

Interesting that they talk about Switzerland and Germany, and then out of left field NORTH DAKOTA, lol.

I thought that the Bank of North Dakota was the only public bank left in the U.S.A. and of course Swiss banks are notorious for hiding money from the tax man. These type of banks are threats to the current system of private banks, so there in is your answer.

Public banks in North Dakota, Germany and Switzerland have been shown to outperform their private counterparts. Under the TPP and TTIP, however, publicly-owned banks on both sides of the oceans might wind up getting sued for unfair competition because they have advantages not available to private banks.

Think about how many companies "might wind up getting sued for unfair competition" if the Mom and Pop businesses had the money and connections to do so. This is just a strong arm tactic to maintain their monopoly on our money. Of course once our money is in the banks, it technically becomes their money to do with as they please.

a reply to: neo96

Hell even the Federal Reserve, and other central banks are essentially PRIVATE ventures.

Yes and look at the great job they did in destroying our economy. Yeah private banks are such a great thing to have.