The Scope of Work for the City of Santa Fe public banking Feasibility Study was released January 16, 2015. Thanks to City Staff for keeping our project moving forward so quickly.
Here’s the schedule to make it official and it’s moving fast.
- Tuesday, January 20 at 5pm, the City Finance Committee will review it.
- Wednesday, January 28 at 11am, it goes before the City’s Quality of Life Committee
- Wednesday, January 28 at 5pm it will go before the City Council for final recommendation
A downloadable pdf file of the Scope of Work document can be found here. Please take some time to consider how it addresses these core reasons to establish a public bank.
Public Funds Belong in Public Banks
Public Banks are banks owned by The People through their representative governments: a city, county, state or a nation.
Founding a Santa Fe Public Bank will surely bring challenges from the Too Big To Fail (TBTF) Banks* and their friends as well as regulatory requirements. We, The People of Santa Fe, believe the long-term benefits to our community are well worth any challenges we may face. Here are a few reasons why:
When a Public Bank makes a loan, the public’s funds remain safely in that bank.
- The Public Bank uses fractional reserve lending rather than literally lending the public’s funds. Through fractional reserve lending, the bank makes a loan by extending bank credit. Bank credit is something like an IOU between banks. Bank credit is newly created “money”.
- Using fractional reserve lending, the bank can create loans for up to 9 times the funds available in the bank, dramatically increasing access to credit in Santa Fe.
- The loan (bank credit) is paid back with interest, resulting in rapidly growing funds to re-invest in Santa Fe.
THE PUBLIC’S FUNDS WOULD NOT BE AT RISK FROM A BAIL-IN. All of the public’s funds would be held and invested safely by our own Public Bank. Investments would be conservative and directed toward long-term gain for Santa Fe.
THE CITY COULD END ITS DEBT CYCLE of borrowing for important public projects from other financial institutions and then paying them back plus interest. If the City instead borrowed from its own Public Bank, that loan plus interest would be paid to our Public Bank to work on behalf of the public good.
A Public Bank could partner with local financial institutions to further increase access to credit in our community.
A Public Bank carries out the mission given to it through enabling legislation. It operates separately and free from the political process or cronyism. It is managed by highly qualified bank staff who receive only a government salary. There is a high level of public review, accountability and transparency to ensure the Public Bank’s mission is carried out in the public’s best interest.
* Too Big To Fail (TBTF) Banks are global banks like Wells Fargo, Bank of America, Chase Morgan Stanley, and Citibank.
