Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
Related: About this forumWhy Public Banks Outperform Private Banks – From North Dakota to Switzerland
http://www.occupy.com/article/why-public-banks-outperform-private-banks-%E2%80%93-north-dakota-switzerlandPublic banks in North Dakota, Germany and Switzerland have been shown to outperform their private counterparts. Under the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership, 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.
In November 2014, the Wall Street Journal reported that the Bank of North Dakota (BND), the nations only state-owned bank, is more profitable than Goldman Sachs Group Inc., has a better credit rating than J.P. Morgan Chase & Co. and hasnt seen profit growth drop since 2003. The article credited the shale oil boom; but as discussed earlier here, North Dakota was already reporting record profits in the spring of 2009, when every other state was in the red and the oil boom had not yet hit. The later increase in state deposits cannot explain the banks stellar record either.
Then what does explain it? 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. It does not need to advertise for depositors (it has a captive deposit base in the state itself) or for borrowers (it is a wholesome wholesale bank that partners with local banks that have located borrowers). The BND also has no losses from derivative trades gone wrong. It engages in old-fashioned conservative banking and does not speculate in derivatives.
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.
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
5 replies, 1142 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (7)
ReplyReply to this post
5 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Why Public Banks Outperform Private Banks – From North Dakota to Switzerland (Original Post)
eridani
Feb 2015
OP
NaturalHigh
(12,778 posts)1. This is a great article.
Please consider posting in General Discussion where it will get more exposure.
eridani
(51,907 posts)2. Good idea. Done n/t
Doctor_J
(36,392 posts)3. for much the same reason that public healthcare outperforms private
No one is taking millions off the top. I wonder if the ACA fan club will be here to defend bankers
1StrongBlackMan
(31,849 posts)4. I doubt this concern will appear in any final agreement ...
as every single party to any agreement has, and wishes to protect, its own SOEs.
Bill USA
(6,436 posts)5. this is something I doubt you'll ever see discussed on M$M. GREAT POST! Recommended! Bookmarked.
"The BND also has no losses from derivative trades gone wrong. It engages in old-fashioned conservative banking and does not speculate in derivatives."