For most of us, switching to a local bank, whether on Bank Transfer Day or any other time of year, brings a sense of personal satisfaction. But what is good for us also has a positive effect on our communities and even worldwide. The benefits go beyond lower fees, better customer service and more traceability. And the effect is bigger than sending a message to the corporate banks that we’re fed up with their behaviour. Changing where we put our money can help change the whole global economy. Kyle Thiermann, a young surfer and activist, summed it up nicely in his recent TEDx talk: “Banks rely on us for our money. And corporations rely on banks.”
It’s not just about where you’re moving your money to, but also where you’re moving it from. Behind nearly every big destructive project is a big bank. From coal mining to mega-dams, tar sands to palm oil plantations, GM technologies to war machines –-every one of these relies on banks for funding. And these banks rely on us to give them the cash.
These corporate banks have also developed some rather cosy relationships with government leaders, using their clout to influence policy in all sorts of unsavoury ways. The imminent G20 meeting (click to sign a petition to Sarkozy!) is a perfect example: ordinary citizens are blocked out, but the banks, among other corporations, have been warmly welcomed in. And their generous sponsorship gladly accepted in exchange.
So in a very real sense we can choose to fund further corporate globalization with our money. Or we can choose to support local economic renewal. According to research by the New Rules Project, smaller banks make a larger proportion of small business loans despite having less than a fifth of the assets of the biggest 20 banks (see first graph below). This means when you put your money in small banks, it’s much likelier to stay local, supporting the provision of goods and services you actually need. More employment opportunities are also created—both at these local businesses and the financial institutions themselves: a 2007 study showed that the 8,344 credit unions in US accounted for close to 500,000 jobs.
Transferring your bank helps to address all these issues, but it is also part of a larger process of shifting our economy from one of exploitation to one of renewal. The Occupy movement has clearly articulated the urgent need for a major change in how we do business. Now we need to put our efforts into pushing for policy shifts at both the national and international levels.
Re-regulating banks and decentralizing business is essential to prevent the accumulation and wealth that enabled these banks to become ‘too big to fail’ in the first place. These kind of systemic policy shifts also have the potential to create sweeping change in every sector—allowing us to simultaneously address ecological crises and social inequities, as well as the financial pressures we’re all experiencing.
As individuals, we have the power to put our money behind what we believe in. When we work together, we also have the power to change policies. Find out more at: www.localfutures.org
Other resources: www.newrules.org
To learn more about banking for a new economy, please join us at The Economics of Happiness Conference, March 23-25, 2012. Speakers include Stacy Mitchell (of The New Rules Project), Richard Heinberg, Annie Leonard, Judy Wicks and many others.