Just Money: Banking as if Society Mattered
https://learning.edx.org/course/course-v1:MITx+11.405x+2T2020/
The global financial crisis of 2007/8 demonstrated the elemental role banks play in our global economic system and our society as a whole. While the crisis highlighted the ways failing banks can undermine society’s well-being, in this course, we’ll explore how banks operate that use finance as a tool to address social and ecological challenges. We call this Just Banking.
This course will introduce you to different models of just banks, and explore how they finance social and green businesses and connect to broader movements to address the societal challenges we face. You will also learn what it takes to run an organization that operates along the triple bottom line, translating a mission and values into day-to-day operations.
Banking, at its core, is about collectively moving capital into the future we envision. So, we will also connect with questions about what that future should look like and how it can be achieved. By the end of this course you’ll understand what just banking is, what these banks do, and how they address social and ecological challenges. But most importantly, you’ll gain the tools to change the world with your own money and your own voice.
My notes:
Banks are intermediaries decision makes of our future, who deal with money which is something everybody needs.
Unbanked and underbanked. Redlining to deny services based on racial composition of neighborhoods. Disinvestment and underinvestment in urban neighborhoods. Predatory lending. Gentrification.
If you don’t have access to financial products, you are excluded.
Banks provide a common good, which conflicts with their for-profit business.
Values-based just banks bridge, serving the real economy to serve the public good.
Use finance as a tool to address social and ecological challenges.
- Transparency about what is financed.
- move beyond standardized products to understand the well being of the communities they serve.
- develop long-lasting relations with these communities.
- operate in the real economy and avoid speculative financial activities
- keep these as the core business model, this is level 2.
Level 3 is to identify lead innovators.
Level 4: what is needed to shift the system.
Evolving economy:
- central planning
- market and competition
- stakeholder groups negotiating with each other
- awareness-based collective action
From ego-system awareness to eco-system awareness.
How to realign the flow of money and flow of capital more closely with where our real intentions are, as opposed to just being driven by externalities outside of our awareness.
A real asset or activity is like an organic farm or an office building.
Degrees of separation from the real economy:
1 degree → loan to manufacture renewable energy. Equity stake.
2 degrees → loan to a hedgefund for buyout. Liquidity deposit with other banks.
3 degrees → credit default swap.
4 degrees → tranche of collateralized debt. Obligation for commercial loans.
Anchors of intention:
- Culture
- Ownership
- People
- Governance & Leadership
- Policies & Processes
- Accountability
Just banks are moving closer to where new ideas spark, co-working spaces. Creating spaces for people to meet and platforms for new ideas. Coordinations for scaling and figuring out what’s next.