9 ms·

When banks abandoned American Samoa, the islands found a solution: public banks

142 points by a_w 8y ago

vl 8y ago
With 60K population 6 hours by plane remote it's a miracle they had any bank branches at all for this long. Cost of having remote branch for any business in these conditions is high, so profits should match it. It makes sense that they need local, more efficient, solutions for the problem.
Lionsion 8y ago
> To understand why banks are scaling back and why it causes American Samoa such pain, imagine a basic small-town bank. It takes in paychecks and other deposits from locals and uses them as reserves when lending to their neighbors, who then invest in property and businesses. > That model breaks down when banks span states or countries. The big banks with tiny branches in American Samoa are happy to take deposits from locals, but when it comes to lending that money back out, it makes cold, actuarial sense to focus on bigger, safer clients elsewhere. This is another pretty good general argument against bank consolidation. In addition to increasing economic fragility during crises, large banks also neglect real communities that need their services during the good times.
- dredmorbius 8y ago
  Risk arbitrage.
  - Retric 8y ago
    Banks have an odd relationship with risk. It's vastly safer to have a large number of banks than to have a much smaller number of banks. The problem is downsides vastly outweigh upside so you increase risk when you join two smaller but reasonably stable entities.
    - dredmorbius 8y ago
      Right, though large banks have other affordances: more leverage from both information systems and relationships, as well as control over assets such as real estate and loans access. What I was pointing out was the arbitrage of collecting cash locally (low risk) whilst seeking low-risk lending opportunities elsewhere. This actually extracts cash from the local community without providing offsetting borrowing opportunities. The community is net worse off. Rational from the bank's perspective.
      - clairity 8y ago
        arbitrage has a more precise meaning than just "you can make money by buying here and then selling there" (otherwise any commerce could be called arbitrage). the defining characteristic of arbitrage is that it is risk-free. taking deposits and loaning out money is not risk-free (because someone might not pay you back in full), so it's not arbitrage. using dollars to buy yen cheaply and then selling it back for more dollars in the same transaction is an example of arbitrage.
      - pishpash 8y ago
        That doesn't make sense. Both deposit and borrowing opportunities exist at some price. Low risk deposits can be sold at a low price and high risk loans can be bought at a high price. If anything, what a bank naturally would want to do is to sell low risk local deposits, taking the cash to buy high risk loans elsewhere in order to collect the risk premium. The same happens in reverse. There is no inherent reason for money to move net-net, unless there is unequal demand for deposits and borrowing. For a place like Samoa, they probably need more borrowing, so banks wouldn't be extracting any cash, but rather bringing it in.
- dnomad 8y ago
  Bank consolidation is inevitable. Large banks are like nuclear weapons. Every nation absolutely needs them or they risk foreign banks and investors rushing in and capitalizing+colonizing the entire country. So if you don't have large banks you're absolutely at the mercy of those who do (when it comes time to raise capital). But once you have large banks it becomes down right unprofitable to invest in small enterprises. As they say, no tier 1 bank is interested in funding an additional lemonade stand. Go big or go home. There's a feedback loop here that Marx understood quite clearly: capital becomes ever more centralized, ever more efficient, ever more demanding of bigger returns and more capital to invest. This process can be slowed but it cannot be stopped. It is also essential to global trade and our modern way of life. The end result is the undercapitalization of virtually everybody but a select wealthy elite. But the internet can fix this. It allows for the creation of markets and coordination very, very cheaply. Crowd funding, p2p lending, Youtube, Patreon, open source software, and yes, cryptocurrencies -- these are the key tools of resistance that will allow the little fish to carve out some measure of autonomy. This is the point. Trillions are locked away in the global mega-banks and the bank-likes. Governments across the globe embrace neoliberal policies and actively disinvest in their own people, cutting services and raising fees. Inequality is rising faster and faster, everywhere. What else is there to do? If the proletariat cannot access the private money locked away in the banks and the public money has mysteriously all disappeared then they have no choice but to literally make their own money and seize the means of production. It's this project, the recapitalization of the proletariat, that is the great challenge of the 21st century.
  - Lionsion 8y ago
    > Bank consolidation is inevitable. Large banks are like nuclear weapons. Every nation absolutely needs them or they risk foreign banks and investors rushing in and capitalizing+colonizing the entire country. I don't think that makes sense. If you don't allow massively consolidated domestic banks to operate in your country, why would you allow massively consolidated foreign banks to do so instead and "colonize" you? > But the internet can fix this. It allows for the creation of markets and coordination very, very cheaply. Crowd funding, p2p lending, Youtube, Patreon, open source software, and yes, cryptocurrencies -- these are the key tools of resistance that will allow the little fish to carve out some measure of autonomy. Personally, I'm moving on from this kind of techno-optimism. I don't think those things can fill these void left by a lack of community banks. Those have their attention focused on their local communities, but your techno-institutions focus their attention on what's attention-grabbing globally. While the latter may be different from what the big banks focus on, it doesn't fix the problems that community banks solve.
- jessriedel 8y ago
  Suppose there was a bank local to American Samoa and another international bank with a branch in American Samoa, and the latter could offer higher interest rates because it saw fewer average defaults when lending money. Are you saying we should prohibit American Samoans from putting their money in the international bank and getting higher returns, effectively forcing locals to lend to other locals?
  - Lionsion 8y ago
    > Are you saying we should prohibit American Samoans from putting their money in the international bank and getting higher returns, effectively forcing locals to lend to other locals? If it improves the local economic conditions by keeping money flowing in the local economy, then such a ban seems like a reasonable trade-off for the common good. Being a greedy individualist, by focusing on chasing after marginally higher savings account interests rates, is likely going to be self-defeating in this case. Your dozens of dollars in extra interest payments are unlikely to compensate you for the other economic hardships you'll encounter because there's no local bank that will bother to make loans to your community.
    - SamReidHughes 8y ago
      It worsens local economic conditions by directing local resources to unprofitable forms of work.
      - mannykannot 8y ago
        I doubt the consequences are worse than those of not having a functional banking system.
      - frgtpsswrdlame 8y ago
        But it doesn't direct local resource to unprofitable forms of work, it directs local resources to less profitable local forms of work rather than more profitable foreign forms of work. That seems like a perfectly reasonable trade-off for a community to make.
      - 8y ago
- xienze 8y ago
  > large banks also neglect real communities that need their services during the good times. Sure, but isn’t that problem solved by credit unions?
  - tathougies 8y ago
    To be honest, almost all banking services are solved by credit unions. This begs the question of why we even need for-profit international banks.
    - patio11 8y ago
      They’re really helpful if you want to live in a world with for-profit international companies. (You want to live in a world with for-profit international companies.)
      - frgtpsswrdlame 8y ago
        Total Edit: Banks don't have to be international to support international companies.
    - 1123581321 8y ago
      Ive worked at a credit union. I’m supportive of the idea. However, credit unions aren’t efficient or even capable of providing all banking services people want. They’re especially poor at banking for people who travel internationally, and at providing business banking. Also, most credit unions either use federal (national) credit unions and large banks for services. We bought our cash from JP Morgan, sold our mortgages to US Bank and kept reserves with a federal CU. Without these services, expenses would have been higher or services would have been reduced.
      - Consultant32452 8y ago
        Interestingly, I had the opposite experience. In my area the credit unions have fees equal to our greater than the big banks for personal accounts. However, one local credit union had the best stats for my small business account. It's worth noting I did not travel internationally or do any international business. Also, their ATM was the old green screen style as late as 2015 and did not accept deposits.
- deleted 8y ago
  [deleted]
- nicoburns 8y ago
  I'm increasingly thinking that this is a pretty good argument against consolidation in any industry (to be weighed against the benefits of economies of scale in the particular case).
- savanaly 8y ago
  If we want to give charity to a class of people via subsidizing credit to them, we should be explicit about it rather than putting moral pressure on banks to make sub-optimal loans alongside honestly offered loans. The idea that the bank is obligated to balance the scales of lending and borrowing seems odd to me as well. I keep a bank account for myself personally of course, and if some day I needed to take a big loan out to start a business I wouldn't consider my decades of having a checking account with the bank as obligating them to extend me the loan regardless of the credit risk they think I am. I voluntarily signed up for a bank account because it's good for me, and if there's nothing in the contract about them having to make me a loan in the future I shouldn't expect one and neither should they.
  - Lionsion 8y ago
    > I voluntarily signed up for a bank account because it's good for me, and if there's nothing in the contract about them having to make me a loan in the future I shouldn't expect one and neither should they. That's libertarian dogma that elides the whole world outside of its narrow logic. Corporations are ultimately meant to be agents that further the public good. They're not vehicles for the unrestrained pursuit of private profit to the exclusion of all other concerns. If natural economic incentives are not enough to motivate them to act in the interests of the public, then its the job of government and its regulations to compel a solution. To wit: if bank consolidation causes public goods such as community lending to be neglected, then government should forbid bank mergers and break up large banks until it no longer is.
    - 49531 8y ago
      > Corporations are ultimately meant to be agents that further the public good. Corporations have rarely (if ever) been meant to further public good. They have almost always been for "unrestrained pursuit of profit to the exclusion of all other concerns". I agree that as soon as they start acting outside public interest they should be reigned in by regulators, the problem is that regulators tend to turn a blind eye when a corporation can pay them to.
      - 8y ago
- dv_dt 8y ago
  It really calls into question the efficiency of large banks, when by their structure, they have constructed inherent barriers to understanding what loans are a risk in communities. It becomes a self fulfilling prophecy that small loans in smaller communities become higher risk...
- deleted 8y ago
  [deleted]
donarb 8y ago
The state of North Dakota has its own bank, the only state that has one. It provides services to citizens of the state such as home, farm and student loans. It also is the bank of the state government, all state tax revenues are deposited there. It was formed in 1919 as a way to allow farmers to get low cost loans. https://en.wikipedia.org/wiki/Bank_of_North_Dakota https://en.wikipedia.org/wiki/Bank_of_North_Dakota
- Slansitartop 8y ago
  This new American Samoan bank is explicitly modeled after the Bank of North Dakota, and the OP goes quite a bit into its benefits.
- 8bitsrule 8y ago
  And, partly as a result, NoDak sailed through the recent recession pretty much scar-free. As a result of legislation by the Nonpartisan League. https://en.wikipedia.org/wiki/Nonpartisan_League https://en.wikipedia.org/wiki/Nonpartisan_League As that article puts it: "On behalf of small farmers and merchants, the Nonpartisan League advocated state control of mills, grain elevators, banks and other farm-related industries in order to reduce the power of corporate political interests" Oh my.
patio11 8y ago
We want a lot of things from retail banking: We want it to be ubiquitous. We want it to be close to free for retail customers. We want it to not lose money on underperforming loans. We want it to extend the social benefits of credit in the community, even if the community is very poor. We want it to be very closely regulated, so that people never lose their money. We want opening a bank to cost less than the net present value of all future banking revenue in American Samoa. It’s really rough satisfying all these wants at the same time.
- kwhitefoot 8y ago
  Sounds like my bank in Norway: SBanken.no. It is better than free for me as it pays interest on my current account.
  - maxerickson 8y ago
    Their (after tax net) profit is 7-10% of the entire economy of American Samoa.
- narrator 8y ago
  The Chinese banking system does this. With regards to not losing money on underperforming loans, the government just prints up money and bails out the banks for all their mistakes. To keep moral hazard from getting out of hand, financial fraud or even rule breaking is punished severely with the worst frauds leading to executions and the banks are micromanaged to the point of being partially privatized central planning.
  - seanmcdirmid 8y ago
    The big Chinese banks (BOC, ICBC, ...) are all SOEs, so they are basically owned by the government. Interest rates on deposits are paltry (even by western standards), and the banks make all their retail money on shadow banking products. What really kills the banks, however, is the loans they are forced to give out to other SOEs.
  - ryankupyn 8y ago
aaronbrethorst 8y ago
Senator Kirsten Gillibrand introduced a postal banking bill last month that would offer similar services to everyone in the United States. It is unlikely that it will even make it to the floor for a vote given the current makeup of Congress, but that could change with this year's midterm elections. https://slate.com/business/2018/04/kirsten-gillibrands-ambitious-postal-banking-bill.html https://slate.com/business/2018/04/kirsten-gillibrands-ambit...
- pseingatl 8y ago
  Postal banking could help revive the postal service. Many countries already provide these services through the postal system. Or even, believe it or not, 7-11.
disordinary 8y ago
I wonder if there's any thought within American Samoa of leaving US administration and re-unifying with Samoa itself. Samoa has several banks, ANZ being the largest. It would make sense and form a country of > 250k rather than having one country of under 200k and another of under 100k.
deleted 8y ago
[deleted]
duxup 8y ago
Nice to see them mention the bank of North Dakota. They had similar issues with local banking needs not being met by anyone else so they started their own bank to float local banks that could and were willing to help locals and fund new local banks as well. It also provides good rates on student loans as well.
madads 8y ago
Germany has 1,500 local not-for-profit community banks. >> https://www.youtube.com/watch?v=EC0G7pY4wRE https://www.youtube.com/watch?v=EC0G7pY4wRE >> https://www.theguardian.com/sustainable-business/local-banks-boost-communities-business https://www.theguardian.com/sustainable-business/local-banks...
pseingatl 8y ago
There are no credit unions in American Samoa? These are fairly easy to establish and are federally insured.
tehabe 8y ago
Public banks are a good idea. It is part of the success of SME in Germany, because we local and public banks to support them. The third pillar are co-op banks. Which have a similar role.
leo399 8y ago
Hello Everybody This is Adrian Smith Leonardo, I am a private lender. I offer all types of loan at a very cheap interest rate of 3%. I give out all types of loan you are in need of and you are very welcome to apply from us because we are one of the best and licensed companies. Contact us today through Email: leonardloans@fastservice.com, Call/Text Us Also: +1 (940) 641-8283. I assure you with 100% guarantee that if you get to us for a loan, you will never leave empty-handed because we will treat you well and make sure you never regret ever knowing or applying from us. We await your application ASAP Best Regards Adrian Smith Leonardo

142 points by a_w 8y ago

vl 8y ago

With 60K population 6 hours by plane remote it's a miracle they had any bank branches at all for this long. Cost of having remote branch for any business in these conditions is high, so profits should match it. It makes sense that they need local, more efficient, solutions for the problem.

Lionsion 8y ago

> To understand why banks are scaling back and why it causes American Samoa such pain, imagine a basic small-town bank. It takes in paychecks and other deposits from locals and uses them as reserves when lending to their neighbors, who then invest in property and businesses. > That model breaks down when banks span states or countries. The big banks with tiny branches in American Samoa are happy to take deposits from locals, but when it comes to lending that money back out, it makes cold, actuarial sense to focus on bigger, safer clients elsewhere. This is another pretty good general argument against bank consolidation. In addition to increasing economic fragility during crises, large banks also neglect real communities that need their services during the good times.

dredmorbius 8y ago
Risk arbitrage.
- Retric 8y ago
  Banks have an odd relationship with risk. It's vastly safer to have a large number of banks than to have a much smaller number of banks. The problem is downsides vastly outweigh upside so you increase risk when you join two smaller but reasonably stable entities.
  - dredmorbius 8y ago
    Right, though large banks have other affordances: more leverage from both information systems and relationships, as well as control over assets such as real estate and loans access. What I was pointing out was the arbitrage of collecting cash locally (low risk) whilst seeking low-risk lending opportunities elsewhere. This actually extracts cash from the local community without providing offsetting borrowing opportunities. The community is net worse off. Rational from the bank's perspective.
    - clairity 8y ago
      arbitrage has a more precise meaning than just "you can make money by buying here and then selling there" (otherwise any commerce could be called arbitrage). the defining characteristic of arbitrage is that it is risk-free. taking deposits and loaning out money is not risk-free (because someone might not pay you back in full), so it's not arbitrage. using dollars to buy yen cheaply and then selling it back for more dollars in the same transaction is an example of arbitrage.
    - pishpash 8y ago
      That doesn't make sense. Both deposit and borrowing opportunities exist at some price. Low risk deposits can be sold at a low price and high risk loans can be bought at a high price. If anything, what a bank naturally would want to do is to sell low risk local deposits, taking the cash to buy high risk loans elsewhere in order to collect the risk premium. The same happens in reverse. There is no inherent reason for money to move net-net, unless there is unequal demand for deposits and borrowing. For a place like Samoa, they probably need more borrowing, so banks wouldn't be extracting any cash, but rather bringing it in.
dnomad 8y ago
Bank consolidation is inevitable. Large banks are like nuclear weapons. Every nation absolutely needs them or they risk foreign banks and investors rushing in and capitalizing+colonizing the entire country. So if you don't have large banks you're absolutely at the mercy of those who do (when it comes time to raise capital). But once you have large banks it becomes down right unprofitable to invest in small enterprises. As they say, no tier 1 bank is interested in funding an additional lemonade stand. Go big or go home. There's a feedback loop here that Marx understood quite clearly: capital becomes ever more centralized, ever more efficient, ever more demanding of bigger returns and more capital to invest. This process can be slowed but it cannot be stopped. It is also essential to global trade and our modern way of life. The end result is the undercapitalization of virtually everybody but a select wealthy elite. But the internet can fix this. It allows for the creation of markets and coordination very, very cheaply. Crowd funding, p2p lending, Youtube, Patreon, open source software, and yes, cryptocurrencies -- these are the key tools of resistance that will allow the little fish to carve out some measure of autonomy. This is the point. Trillions are locked away in the global mega-banks and the bank-likes. Governments across the globe embrace neoliberal policies and actively disinvest in their own people, cutting services and raising fees. Inequality is rising faster and faster, everywhere. What else is there to do? If the proletariat cannot access the private money locked away in the banks and the public money has mysteriously all disappeared then they have no choice but to literally make their own money and seize the means of production. It's this project, the recapitalization of the proletariat, that is the great challenge of the 21st century.
- Lionsion 8y ago
  > Bank consolidation is inevitable. Large banks are like nuclear weapons. Every nation absolutely needs them or they risk foreign banks and investors rushing in and capitalizing+colonizing the entire country. I don't think that makes sense. If you don't allow massively consolidated domestic banks to operate in your country, why would you allow massively consolidated foreign banks to do so instead and "colonize" you? > But the internet can fix this. It allows for the creation of markets and coordination very, very cheaply. Crowd funding, p2p lending, Youtube, Patreon, open source software, and yes, cryptocurrencies -- these are the key tools of resistance that will allow the little fish to carve out some measure of autonomy. Personally, I'm moving on from this kind of techno-optimism. I don't think those things can fill these void left by a lack of community banks. Those have their attention focused on their local communities, but your techno-institutions focus their attention on what's attention-grabbing globally. While the latter may be different from what the big banks focus on, it doesn't fix the problems that community banks solve.
jessriedel 8y ago
Suppose there was a bank local to American Samoa and another international bank with a branch in American Samoa, and the latter could offer higher interest rates because it saw fewer average defaults when lending money. Are you saying we should prohibit American Samoans from putting their money in the international bank and getting higher returns, effectively forcing locals to lend to other locals?
- Lionsion 8y ago
  > Are you saying we should prohibit American Samoans from putting their money in the international bank and getting higher returns, effectively forcing locals to lend to other locals? If it improves the local economic conditions by keeping money flowing in the local economy, then such a ban seems like a reasonable trade-off for the common good. Being a greedy individualist, by focusing on chasing after marginally higher savings account interests rates, is likely going to be self-defeating in this case. Your dozens of dollars in extra interest payments are unlikely to compensate you for the other economic hardships you'll encounter because there's no local bank that will bother to make loans to your community.
  - SamReidHughes 8y ago
    It worsens local economic conditions by directing local resources to unprofitable forms of work.
    - mannykannot 8y ago
      I doubt the consequences are worse than those of not having a functional banking system.
    - frgtpsswrdlame 8y ago
      But it doesn't direct local resource to unprofitable forms of work, it directs local resources to less profitable local forms of work rather than more profitable foreign forms of work. That seems like a perfectly reasonable trade-off for a community to make.
    - 8y ago
xienze 8y ago
> large banks also neglect real communities that need their services during the good times. Sure, but isn’t that problem solved by credit unions?
- tathougies 8y ago
  To be honest, almost all banking services are solved by credit unions. This begs the question of why we even need for-profit international banks.
  - patio11 8y ago
    They’re really helpful if you want to live in a world with for-profit international companies. (You want to live in a world with for-profit international companies.)
    - frgtpsswrdlame 8y ago
      Total Edit: Banks don't have to be international to support international companies.
  - 1123581321 8y ago
    Ive worked at a credit union. I’m supportive of the idea. However, credit unions aren’t efficient or even capable of providing all banking services people want. They’re especially poor at banking for people who travel internationally, and at providing business banking. Also, most credit unions either use federal (national) credit unions and large banks for services. We bought our cash from JP Morgan, sold our mortgages to US Bank and kept reserves with a federal CU. Without these services, expenses would have been higher or services would have been reduced.
    - Consultant32452 8y ago
      Interestingly, I had the opposite experience. In my area the credit unions have fees equal to our greater than the big banks for personal accounts. However, one local credit union had the best stats for my small business account. It's worth noting I did not travel internationally or do any international business. Also, their ATM was the old green screen style as late as 2015 and did not accept deposits.
deleted 8y ago
[deleted]
nicoburns 8y ago
I'm increasingly thinking that this is a pretty good argument against consolidation in any industry (to be weighed against the benefits of economies of scale in the particular case).
savanaly 8y ago
If we want to give charity to a class of people via subsidizing credit to them, we should be explicit about it rather than putting moral pressure on banks to make sub-optimal loans alongside honestly offered loans. The idea that the bank is obligated to balance the scales of lending and borrowing seems odd to me as well. I keep a bank account for myself personally of course, and if some day I needed to take a big loan out to start a business I wouldn't consider my decades of having a checking account with the bank as obligating them to extend me the loan regardless of the credit risk they think I am. I voluntarily signed up for a bank account because it's good for me, and if there's nothing in the contract about them having to make me a loan in the future I shouldn't expect one and neither should they.
- Lionsion 8y ago
  > I voluntarily signed up for a bank account because it's good for me, and if there's nothing in the contract about them having to make me a loan in the future I shouldn't expect one and neither should they. That's libertarian dogma that elides the whole world outside of its narrow logic. Corporations are ultimately meant to be agents that further the public good. They're not vehicles for the unrestrained pursuit of private profit to the exclusion of all other concerns. If natural economic incentives are not enough to motivate them to act in the interests of the public, then its the job of government and its regulations to compel a solution. To wit: if bank consolidation causes public goods such as community lending to be neglected, then government should forbid bank mergers and break up large banks until it no longer is.
  - 49531 8y ago
    > Corporations are ultimately meant to be agents that further the public good. Corporations have rarely (if ever) been meant to further public good. They have almost always been for "unrestrained pursuit of profit to the exclusion of all other concerns". I agree that as soon as they start acting outside public interest they should be reigned in by regulators, the problem is that regulators tend to turn a blind eye when a corporation can pay them to.
    - 8y ago
dv_dt 8y ago
It really calls into question the efficiency of large banks, when by their structure, they have constructed inherent barriers to understanding what loans are a risk in communities. It becomes a self fulfilling prophecy that small loans in smaller communities become higher risk...
deleted 8y ago
[deleted]

donarb 8y ago

The state of North Dakota has its own bank, the only state that has one. It provides services to citizens of the state such as home, farm and student loans. It also is the bank of the state government, all state tax revenues are deposited there. It was formed in 1919 as a way to allow farmers to get low cost loans. https://en.wikipedia.org/wiki/Bank_of_North_Dakota https://en.wikipedia.org/wiki/Bank_of_North_Dakota

Slansitartop 8y ago
This new American Samoan bank is explicitly modeled after the Bank of North Dakota, and the OP goes quite a bit into its benefits.
8bitsrule 8y ago
And, partly as a result, NoDak sailed through the recent recession pretty much scar-free. As a result of legislation by the Nonpartisan League. https://en.wikipedia.org/wiki/Nonpartisan_League https://en.wikipedia.org/wiki/Nonpartisan_League As that article puts it: "On behalf of small farmers and merchants, the Nonpartisan League advocated state control of mills, grain elevators, banks and other farm-related industries in order to reduce the power of corporate political interests" Oh my.

patio11 8y ago

We want a lot of things from retail banking: We want it to be ubiquitous. We want it to be close to free for retail customers. We want it to not lose money on underperforming loans. We want it to extend the social benefits of credit in the community, even if the community is very poor. We want it to be very closely regulated, so that people never lose their money. We want opening a bank to cost less than the net present value of all future banking revenue in American Samoa. It’s really rough satisfying all these wants at the same time.

kwhitefoot 8y ago
Sounds like my bank in Norway: SBanken.no. It is better than free for me as it pays interest on my current account.
- maxerickson 8y ago
  Their (after tax net) profit is 7-10% of the entire economy of American Samoa.
narrator 8y ago
The Chinese banking system does this. With regards to not losing money on underperforming loans, the government just prints up money and bails out the banks for all their mistakes. To keep moral hazard from getting out of hand, financial fraud or even rule breaking is punished severely with the worst frauds leading to executions and the banks are micromanaged to the point of being partially privatized central planning.
- seanmcdirmid 8y ago
  The big Chinese banks (BOC, ICBC, ...) are all SOEs, so they are basically owned by the government. Interest rates on deposits are paltry (even by western standards), and the banks make all their retail money on shadow banking products. What really kills the banks, however, is the loans they are forced to give out to other SOEs.
- ryankupyn 8y ago

aaronbrethorst 8y ago

Senator Kirsten Gillibrand introduced a postal banking bill last month that would offer similar services to everyone in the United States. It is unlikely that it will even make it to the floor for a vote given the current makeup of Congress, but that could change with this year's midterm elections. https://slate.com/business/2018/04/kirsten-gillibrands-ambitious-postal-banking-bill.html https://slate.com/business/2018/04/kirsten-gillibrands-ambit...

pseingatl 8y ago
Postal banking could help revive the postal service. Many countries already provide these services through the postal system. Or even, believe it or not, 7-11.

disordinary 8y ago

I wonder if there's any thought within American Samoa of leaving US administration and re-unifying with Samoa itself. Samoa has several banks, ANZ being the largest. It would make sense and form a country of > 250k rather than having one country of under 200k and another of under 100k.

deleted 8y ago

[deleted]

duxup 8y ago

Nice to see them mention the bank of North Dakota. They had similar issues with local banking needs not being met by anyone else so they started their own bank to float local banks that could and were willing to help locals and fund new local banks as well. It also provides good rates on student loans as well.

madads 8y ago

Germany has 1,500 local not-for-profit community banks. >> https://www.youtube.com/watch?v=EC0G7pY4wRE https://www.youtube.com/watch?v=EC0G7pY4wRE >> https://www.theguardian.com/sustainable-business/local-banks-boost-communities-business https://www.theguardian.com/sustainable-business/local-banks...

pseingatl 8y ago

There are no credit unions in American Samoa? These are fairly easy to establish and are federally insured.

tehabe 8y ago

Public banks are a good idea. It is part of the success of SME in Germany, because we local and public banks to support them. The third pillar are co-op banks. Which have a similar role.

leo399 8y ago

Hello Everybody This is Adrian Smith Leonardo, I am a private lender. I offer all types of loan at a very cheap interest rate of 3%. I give out all types of loan you are in need of and you are very welcome to apply from us because we are one of the best and licensed companies. Contact us today through Email: leonardloans@fastservice.com, Call/Text Us Also: +1 (940) 641-8283. I assure you with 100% guarantee that if you get to us for a loan, you will never leave empty-handed because we will treat you well and make sure you never regret ever knowing or applying from us. We await your application ASAP Best Regards Adrian Smith Leonardo