The role of social banking

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The role of social banking
Katharina Beck,
02 October 2011
Internazionale a Ferrara, Italy

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The Institute for Social Banking
• Summer School on Social Banking
• Certificate in Social Banking
• Introduction and Expert Seminars
• Knowledge generation

3. Different faces of banking
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Pictures: http://hookz.killing4space.de/?p=903, Zukunftsstiftung Landwirtschaft

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"If the people knew tonight,
exactly how the monetary and
banking system worked, there
would be a revolution before
tomorrow morning.“
Abraham Lincoln
Banks are „kind of“ relevant...

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Demonstrations on Brooklyn Bridge, „Occupy wall street“-movement, 1st
October 2011, New York.
Picture taken from www.tagesschau.de

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Europe

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Values: Trasparency, Participation, People,...
Social-
ecological
"The highest interest is for all.“
"Banking for a Sustainable Future“
"Money is there for people!“
"Consultation for giving. Funding and support for charitable institutions.“
"Managing money consciously“
"A different bank for people who want a different world.“
"Today's bank for a better tomorrow.“
"Committed to social justice within a sustainable economy“
"Our values: ethics, transparency, solidarity“
„Supporting socially responsible places of residence and work“

8. Bank
•Intermediary
•Allocates money
•Maturity
transformation
•Risk transformation
•Information
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Banks as „simple“ intermediaries
Those who
have money
Those who need
money / real
economy
asset loans
Basis: TRUST
2. Social Banking

9. A „normal“ service
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Picture: Katharina Beck

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Understanding money as a tool
Different qualities of
money

11. Publication of financed projects, e.g. Triodos
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12. Examples for criteria
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Social Banking

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Multi-dimensional core business
Combining several
dimensions.

15. Global Alliance for Banking on Values
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www.gabv.org

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Banking with the poor
Picture: Oikocredit Social Performance Report 2010, p. 3.
Micro-
finance

17. GABV: Different approaches

18. Balance Sheet (2009/10)
in Mio. US $
No. of Customers
ABS 898 24000
Banca Etica 973 40000
BancoSol 495 390000
BRAC 1366 898000
Cultura Bank 66 4200
GLS Bank 2000 100000
Integral 75 42000
Merkur 290 16000
Mibanco 1586 500000
New Resource Bank 159 2000
OnePacificCoast Bank 99 800000
Triodos Bank 4311 500000
Vancity 13640 750000
Xac Bank 223 225000
TOTAL 26.181 4.251.200
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13 GABV Banks: world

19. Performance of balance sheets: Europe
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20. Comparing some monetary numbers...
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Social banks in Europe: Balance sheets (2009/10) 9 Bn. €
GABV banks: Balance sheets (2009/10) 19 Bn. €
National Budget of Italy (2009) 785 Bn. €
GDP Italy (2010) 1‘773 Bn. €
National Debt Italy (2011) 1‘890 Bn. €
BNP Paribas: Balance sheet (2010) 2‘960 Bn. €
SRI (Europe, incl. broad SRI, 2010) 5‘000 Bn. €
GDP worldwide (2010) 60‘000 Bn. €
„Value“ of derivatives worldwide (BIS; 2008)600‘000 Bn. €
„It is unclear how much money exists in the world.“ (P. Dembinski)

21. People seeking „sense“
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Pictures: www.brandeins.de and www.yogamob.org

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2.Role models / reference
(long-time experience, focus on real economy
and the human being, „True“ eco-social goals,
participation, transparency)
3.Thought leadership
(focus on relation and not transaction, proposals
for regulation)
4.Values and focus on the human being
(„dare to be different“)

Social banks‘ uniqueness and role

23. Challenges for Social Banks (Europe)
•Inconsistent customer demands (security und return vs
transparency and responsibility)
•Conversion rate to loans decreases (Are there enough „investible“
eco-social projects in the „real economy“?)
•Finding the „right“ new co-workers (Values and dilemma
competence)
•Low interest rates (investment banking pays off better than
conventional banking)
•Basel III and regulation (e.g. for GLS Bank)
•Maintaining uniqueness while larger banks adopt sustainability
strategies with much larger marketing budgets
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Money in the digital world?
Social
Media
http://www.youtube.com/watch?v=ekF8Zsv5F3w
The future of money?
New currencies?
Giving and
donations

25. Financial sector: „de-humanised“?
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•Over 500.000 structured financial
products (not easy to understand)
•Much higher „value“ in
derivatives than in GDP
(„unreal“?)
•Computerisation / Digitalisation
(„the human element“?)
•„Transactionitis“ (vs relations)
•Speed
•„Traders more destructive than
psychopaths“ (Study of the
University of St. Gallen, 2011)

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Who is in charge?
Change on a system level
Change on an organisational level
Change on an individual level
Global markets –
„local“ regulation.
Pictures: taken from google pictures.

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2.Separation of retail and investment baking
3.Financial transaction tax
4.Closing of tax havens
5.Only allow what we can understand (simple and
transparent financial „products“).
6.Make OTC public and transparent.
7.Rating agencies shall be paid by financial services tax.
8.Increase financial literature.
9.Change incentive structures.
=> Back to „boring“ (Max Otte), human banking?

„Social Banking“ proposals for solutions

28. Katharina Beck
Director | Institute for Social Banking
Christstr. 9
44789 Bochum
[email protected]
0234 / 60 60 01 32
www.social-banking.org
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Thank you!
Picture: Katharina Beck.
The pictures belong to the Institute for Social Banking if not otherwise indicated

29. Social Banks (in the North)
•Explicit self-perception as intermediary to depositors and
borrowers
•Main goal: contribution to further the common good
•No profit maximisation and perverted incentive / bonus structures
•No speculation
•Needs in the real economy / society
•Ownership structures that help prevent short-termism
•Triple bottom line / positive and negative criteria
•Transparency (e.g. publication of loans)
•Reflection of motives (why?), actions (what?) and approaches
(how?)
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