How Public Banks Can Solve the Covid-19 Economic Crisis

Public banks, banks owned by the public, have been shown to respond more rapidly, effectively and equitably to crises than privately-owned banks. Colorado Leaders and Legislators were invited to learn how at an informative Town Hall titled “Public Banking Town Hall for Colorado Leaders: Bring on the Power of Public Banking,” hosted by the Public Banking Institute and the Colorado Public Banking Coalition on Friday, June 5th. Representatives from across the state were in attendance including Pitkin County, Adams County, Eagle County, Aurora, Nederland and Ridgway.

Even after the CARES stimulus package, states and cities face serious budget crises and communities are struggling to survive in the wake of mass unemployment, exploding costs, and plummeting tax revenues. Interest rates on municipal bonds have shot up, while interest rates for banks have dropped virtually to zero. With many wondering what states and cities can do to respond during this time of crisis, the public banking solution has emerged as a viable option, with many considering the option of starting their own publicly-owned banks.

“A state bank could partner with community banks to grant very low cost loans directly to Main Street businesses, just as Germany’s public bank KfW is doing,” said Ellen Brown of the Public Banking Institute, who has also authored several books on public banking including The Public Bank Solution and Web of Debt. “Taking action now not only would mitigate the current crisis but would create a trustworthy and efficient financial infrastructure that can keep communities productive and healthy long into the future.”

Town Hall panelists examined how a public bank could become a real financial lifeline to struggling Colorado communities desperate for funds, staving off economic disaster and jump-starting the economy.

“In 2008, the Bank of North Dakota completely prevented recession in North Dakota by increasing loans to offset the decline. Colorado could reverse the present recession in a year with an adequately funded state public bank.  It’s time to grab the buffalo by the horns,” shared Earl Staelin, Chais of Rocky Mountain Public Banking Institute and founding member of the Colorado Public Banking Coalition. 

Panelists included Earl Staelin, Rocky Mountain Public Banking Institute Chair and Colorado Public Banking Steering Committee Member, and Ellen Brown, Public Banking Institute Chairman.