Dick,

Bless your heart for keeping the flame of public banking alive.    (I read the German report, and was unable to copy and paste the usual IMF drivel about an export economy,  but will comment on that).      The neoliberal economic view promotes de-unionization,  outsourcing to cheap labor countries,  and privatization that ends in sucking the national economies dry,   while focused on exports to compensate,  which they do not,   as they channel upwards to the elites.      What we need is to re-localize economies,   re-unionize,   and fund public infrastructure with public banking.     To do anything less,  is to feed the global 1% and  encourage another meltdown that endangers all of us.   The sell-off of our public infrastructure and lands to the private sector has been well-documented by Matt Taibbi in his book “Griftopia”,  as the precursor to right-wing populism in rebellion.    We need a counterbalancing strategy in the public interest,  with fairly spread benefits,   or we’re in for another “market failure.”

Dianne,

The relevant portion of the report is on page 88.   From p. 88:  

“The focus of the paper is on LBs. Most LBs are characterized by a complex relationship with their Sparkassen, with Sparkassen being co-owners of the LBs and at the same time among the main clients of LBs. This raises the possibility of cross-subsidization or the possibility that LBs provide services to Sparkassen that would otherwise be unavailable from commercial banks. However, there is little evidence of such cross-subsidization or dependency. Sparkassen representatives note that they buy products from LBs when they are competitive or have other attractive features, not because of subsidies or the lack of alternatives. Landesbanken representatives confirm that services are provided at a competitive price and because of familiarity with Sparkassen needs, and do not represent cross subsidies.
Further, Sparkassen are different in several respects from LBs. From the cost perspective, they have not resulted in substantial out-of-pockets costs to taxpayers, unlike some LBs. Nonetheless, public Sparkassen ownership entails opportunity costs to the taxpayer. With an average ROE of 5.2 percent in the last decade, they have been historically more profitable than LBs, but less profitable than comparable banks in peer countries (Table 8). Using the same methodology and assumptions as for the LBs, preliminary calculations suggest that the opportunity costs of Sparkassen is estimated to be 0.17 percent of GDP annually, which translates to an improvement of the intertemporal net worth of 6.6 percent of GDP (equivalent to lowering the public sector debt by 12.5 percent of GDP by 2050). “

Ellen Brown of the Public Banking Institute sent me this email comment about the IMF report:

“I just looked at p. 88. As they note, the Sparkassen aren’t the Landesbanken and don’t have their problems. I don’t know what they mean about lost opportunity costs. So what if some banks in other regions are more profitable? The Sparkassen aren’t focused solely on profits; they’re focused on serving the community. The profits come from the businesses they service that wouldn’t otherwise get affordable loans. Note this study was in 2006, before the 2008 crisis, when it was all about profitability. After that it was recognized that public banks were more stable and provided credit to communities when private banks failed. I’ve written quite a bit about that.”

Yes,   I have her book;   Ellen Brown is my idol.   Wish we had an actual bill to take to our state reps at this point   I’m sure Liz Lovelett will listen.     But again,  the IMF is usually focused on export economies,  not local beneficiaries.   Thank God we didn’t pass the TPP,    which would have made public banks illegal,   and banned “Buy American.”  It was written by and for the banksters and Big Ag,   Big Oil.   It was worth fighting,  even if Trump took credit for deleting it,  and Hillary lost because she didn’t mention it in the Rustbelt debates.    (Indeed, she had referred to it as the “gold standard” of all trade agreements!)     But it was already defeated by progressives who knew what they were up to.     It wouldn’t have passed the Lame Duck Congress in 2016.       I do know a big barrier is the state treasurer;   he spoke up against the state bank idea about 8 years ago when he was here at some Dem event (can’t remember which).      Maybe neoliberalism has passed its peak -   we can only hope.

In Italy, where my family moved twenty-odd years ago, evryone has access to free, basic banking through the post offices. It’s an excellent system to guarantee everyone access to banking services.

Kurt,

Exactly.   Thanks.

As you probably already know, there’s a precedent for a public state bank in North Dakota. It’s been successful and popular there, and it would I’m sure be here as well.

Kurt,

Oh yes,  I’ve been working on that for over 10 years.   (sigh).   If we had Bernie or Elizabeth for Pres,  we might just get it.