[P2P-F] Fwd: Putting banking back in the hands of the people: The role of regional cooperative banks in community wealth building

Mon Jan 14 05:51:54 CET 2019

---------- Forwarded message ---------
From: jules peck <jules at flourishingenterprise.org>
Date: Thu, Jan 3, 2019 at 6:18 PM
Subject: Fwd: Putting banking back in the hands of the people: The role of
regional cooperative banks in community wealth building
To: Michel Bauwens <michel at p2pfoundation.net>, Vasilis Kostakis <
kostakis.b at gmail.com>

Hi if you like this please do circulate and tweet etc

Yours in cooperation
Jules Peck

FRSA
<https://www.thersa.org/discover/publications-and-articles/rsa-blogs/2017/10/building-community-wealth-in-the-banking-sector>,
Founding Director Avon Mutual <https://avonmutual.org/> Bank, Research
Fellow Democracy Collaborative's Next System Project
<https://thenextsystem.org/jules-peck>, Board member New Economics
Foundation <http://neweconomics.org/>, Trustee Sanitation First
<http://sanitationfirst.org/>.

m: 00 44 7920844802 https://www.linkedin.com/in/jules-peck-72604933/
<https://www.linkedin.com/in/jules-peck-72604933/>
'*Aspire not to have more but to be more'* Archbishop Oscar Romero - or as
Yoda put it '*Do or do not - there is no try.*'

---------- Forwarded message ---------
From: jules peck <jules at flourishingenterprise.org>
Date: Thu, Jan 3, 2019 at 5:16 PM
Subject: Putting banking back in the hands of the people: The role of
regional cooperative banks in community wealth building
To: Jules Peck <julespeckflourishing at gmail.com>

Happy new year.

I thought you might be interested in this new blog by us which is posted here
by RSA
<https://www.thersa.org/discover/publications-and-articles/rsa-blogs/2019/01/putting-banking-back-in-the-hands-of-the-people---the-role-of-regional-cooperative-banks-in-community-wealth-building>
and in the US by here by Democracy Collaborative
<https://thenextsystem.org/learn/stories/putting-banking-back-hands-people-role-regional-cooperative-banks-community-wealth>
.

If you like it please do send on and tweet it.

Putting banking back in the hands of the people: The role of regional
cooperative banks in community wealth building
If you’re in any way a follower of the ‘new economics’ movement you will
probably have heard of the ‘community wealth building’ mantra which is
gaining ground as common language. So, what exactly is this new approach to
growing local economies?

Community wealth building

If you’re in any way a follower of the ‘new economics’ movement you will
probably have heard of the ‘community wealth building’ mantra which is
gaining ground as common language. So, what exactly is this new approach to
growing local economies?

The Democracy Collaborative
<https://democracycollaborative.org/democracycollaborative/local-economies/Stronger%20local%20economies>,
where I’m a Next System Project
<https://thenextsystem.org/learn/collections/new-systems-possibilities-and-proposals>
Research
Fellow, defines community wealth building as a broad range of models and
innovations such as co-ops, community development finance initiatives
(CDFIs) and community banks that “aim at improving the ability of
communities and individuals to increase asset ownership, anchor jobs
locally by broadening ownership over capital, help achieve key
environmental goals, expand the provision of public services and ensure
local economic stability”.

One key way to achieve this  is to stop money leaking out of communities by
leveraging public procurement and investment through ‘anchor institutions’
like local authorities, universities and hospitals. Another important shift
is towards regionalising and localising financial flows and keeping money
in communities through initiatives such as local currencies and community
banks.

While this approach emerged in the US with work by the Democracy
Collaborative leading to   the pioneering ‘Cleveland model’, which is now
inspiring numerous other US cities
<https://community-wealth.org/strategies/cw-cities/index.html>, this is now
rapidly catching on in the UK. Democracy Collaborative UK Fellow, Matthew
Brown, has been leading the way with his work on the ‘Preston model
<https://cles.org.uk/tag/the-preston-model/>’ which emerged in 2011, and
has led to the city being named the best place to live and work in the
North West
<https://www.theguardian.com/uk-news/2016/nov/08/preston-named-best-city-live-work-north-west-england>
and most improved city in the UK
<https://www.theguardian.com/politics/2018/nov/01/preston-named-as-most-most-improved-city-in-uk>.
These are encouraging signs for other cash strapped councils looking for a
new way of doing things.

Preston along with other local authorities such as Bristol, Liverpool and
Croydon are now part of the UK Cooperative Councils Innovation Network
<https://www.councils.coop/>, a new network which, along with organisations
like CLES, Stir to Action, Nef and Co-operatives UK, is spearheading the
championing of cooperative values and models in communities across the UK.

This movement is allied, and hopefully will link more and more, to other
democratizing citizen-led movements such as the Fearless Cities
<http://fearlesscities.com/> movement originated by the Barcelona en Comú
citizen platform and the emerging peer2peer City as Commons
<https://blog.p2pfoundation.net/urban-commons-initiatives-in-the-city-of-ghent-a-commons-transition-plan-by-bauwens/2017/10/24>
work
in places like Ghent.

Whilst many of the above are relatively new movements, there is a long and
proud tradition of cooperative and community wealth based work in places
like the Emilia Romagna Social Economy
<https://thenextsystem.org/learning-from-emilia-romagna>, Quebec Social
Economy
<http://www.resilience.org/stories/2017-04-12/quebec-can-teach-us-creating-equitable-economy/>
and
the Mondragon <https://en.wikipedia.org/wiki/Mondragon_Corporation>
 complex. As John Restakis
<https://thenextsystem.org/cooperative-commonwealth-partner-state> and Mike
Lewis
<https://thenextsystem.org/navigating-system-transition-volatile-century> show
in their Next System Project essays, in many of these places the majority
of public services such as care and education and many products and other
services, are delivered neither by the state nor by private capital but
instead by citizens, community businesses and civic associations in close
partnership with local government.

The role of regional community cooperative banks in community wealth
building

As the investment function in national and local economies is so key and
influences the character of the rest of the economy, one crucial player in
the institutional landscape of all successful examples of community wealth
building is a community bank, which along with other CDFIs, plays an
important role in shifting power away from capital, to citizens. For
example, the founding of Caja Laboral bank in Spain was key to the
emergence and growth of what is now Mondragon, a co-op with $12bn revenues
and 75,000 employee owners.

An important new player in the community wealth building landscape in the
UK, and one which is following in the footsteps of examples across North
America like Desjardins <https://en.wikipedia.org/wiki/Desjardins_Group> and
VanCity and the hundreds of similar enterprises across the EU, is the
Community Savings Bank Association (CSBA <http://www.csba.co.uk/>) which is
launching 18 regional cooperatively owned banks across the UK.

In Germany, Sweden, Denmark, Italy, Spain and France a host of community
and state-owned banks like the Landesbanks, JAK Bank and agricultural
co-operative banks all serve such needs and make up as much as 64% of the
banking market. Regional banks have been absent in the UK since the last
ones, including the original Trustee Savings Banks, were swallowed up by
large clearing banks in the 1980s. Furthermore, there have never been true
cooperative banks in the UK - until now. The law was changed
<https://www.legislation.gov.uk/ukpga/2014/14/contents> in 2014 and it is
now possible to gain a full deposit taking bank license in the UK as a
cooperative.

Soon after this change in UK law the Inclusive Growth Commission
<https://www.thersa.org/action-and-research/rsa-projects/public-services-and-communities-folder/inclusive-growth-commission/>
 of the RSA
<https://www.thersa.org/discover/publications-and-articles/rsa-blogs/2017/06/everyone-a-banker-welcome-to-the-new-co-operative-banking-movement/>,
chaired by Bloomberg’s Stephanie Flanders
<https://en.wikipedia.org/wiki/Stephanie_Flanders>, recommended the setting
up of regional banks as an important way to deliver inclusive growth in the
UK.

A group of innovators and RSA Fellows have spent the last few years
building the concept of ‘community banks in a box’, and the RSA is now
working with the CSBA to facilitate the development of a UK wide network of
regional community banks.

As well as the bank I have helped found in the West of England region, Avon
Mutual <http://www.avonmutual.org/>, we have banks already in formation in
London <http://www.glmbnk.co.uk/> and the South West
<https://southwestmutual.co.uk/> and soon we hope in the Preston,
Merseyside and Lancashire region, as well as in Wales where our bank model
was a key plank of the newly elected First Ministers manifesto
<https://www.mark4leader.wales/wp-content/uploads/2018/11/manifesto-english-print.pdf>
in
which he committed to supporting and investing in starting our bank in
Wales in 2019.

Community wealth building has also been taken into the heart of Westminster
with Shadow Chancellor John McDonnell having launched a Community Wealth
Building Unit
<https://www.thenews.coop/126193/sector/community/john-mcdonnell-announces-formation-community-wealth-unit/>which
is increasingly influencing Labour Party policy. The idea of spending
locally to support small business and high streets is also high on the
agenda of many Conservative councils, particularly in more rural areas and
our South West Mutual bank has already had investment from several Conservative
Councils <https://themoorlander.co.uk/councils-pledge-100k-for-local-bank/> in
Devon. It’s exciting see that there is no party political split on these
issues and in the West of England we are likewise finding that our bank
model appeals to both Conservative and Labour Councils as well as to Lib
Dems, Greens and the Co-operative Party.

Our mission is to help redress regional inequalities, build financial
inclusion, significantly increase the proportion of bank lending going to
the ‘real’ economy and SMEs instead of the financial economy, build
economic resilience, and bring about a renaissance of customer service,
relationship banking and trust.

These banks will be full deposit-taking savings and loan retail and
business banks. In that regard we will have the same functionality and feel
as normal high street banks with branches, and online and mobile
connectivity. But we won’t be trading and involved in the speculative
‘financialized’ economy - just the real economy of our regions. Using local
savings to lend to local citizens, businesses and other institutions.
Relationship banking will be key to our model’s success - unlike a distant
algorithm which usually says ‘no’ our lending officers will be embedded in
their communities and their needs.

Our banks will serve the everyday financial needs of our member customers -
ordinary citizens, local community groups, and small and medium sized
companies. We will also work closely with local authorities, universities,
housing associations, credit unions, community development corporations,
CDFIs, local social investment funds, revolving loan funds and others. And
we aim to become a key anchor institution supporting the growth of other
community wealth building institutions and focused on promoting sustainable
and inclusive prosperity for our region.

We have a strong focus on relationship banking, a renaissance of high
street branches, small and micro enterprise and banking the unbanked and
underbanked citizen, thus significantly impacting the ‘poverty premium
<http://www.bristol.ac.uk/geography/research/pfrc/themes/finexc/poverty-premium/>’
associated with not having banking facilities. We aim to rebuild trust in
banking and our democratic structure means that every member, not every
share, gets a vote.

Avon Mutual will provide services to approaching 1000 SME businesses and
social businesses in year 1, rising to over 14,000 in year 5, creating and
supporting thousands of jobs. We hope to build to 85,000 retail and 18,000
business members by year 10.

The social impact of these activities is also enhanced by the fact that
these loans are spent into the real and productive economy, creating a
local impact multiplier that delivers a further 76% of value to the local
economy. All of this will be measured working with best-in-class advisory
services and reported regularly to members and society.

We will also model the values of community wealth building by being a
living wage employer, having a 10:1 pay ratio for staff and having no bonus
or sales incentives encouraging cross selling and over-selling. Our
democratic structure means every member gets an equal say in how the bank
operates, no matter how few or many shares they own.

Community wealth building in the West of England

As I grew up and am based in the West of England I’m particularly
interested in the potential for this region to become an exemplar of the
sorts of initiatives mentioned above.

In addition to soon having its own regional community owned bank, there is
already a huge amount of activity, enthusiasm, energy and networks of trust
amongst diverse players which represent solid foundations on which to build.

A New Economy Summit
<http://bristolgreencapital.org/celebrating-the-future-at-bristols-new-economy-summit/>
I
helped organise in Bristol two years ago was witness to this energy as
there was standing room only, with hundreds of people spending two days
exploring the potential of community wealth building in the region. And at
a Finance Innovation Lab <https://financeinnovationlab.org/> and Democracy
Collaborative day long 2º City Finance Lab event in November 2018, a group
of 50 people from the region and around the world got together to explore
how the city of Bristol could use innovative finance mechanisms and
institutions like Avon Mutual to deliver on our climate change commitments.

The region already boasts a host of innovative initiatives such as: Bristol
and Bath Regional Capital <https://www.bab-rc.uk/>; Resonance
<https://resonance.ltd.uk/> Funds; Bristol Credit Unio
<https://www.bristolcreditunion.org/>n; Bath and West Community Energy
<http://www.bwce.coop/>; Bristol Energy <https://www.bristol-energy.co.uk/>
; United Communities <https://www.unitedcommunities.org.uk/>; Sustrans
<https://www.unitedcommunities.org.uk/>, Soil Association
<https://www.soilassociation.org/>; Bristol Pound
<https://bristolpound.org/>; Happy City <http://www.happycity.org.uk/>; Bristol
Green Capital Partnership <http://bristolgreencapital.org/>; Festival of
Ideas <http://www.ideasfestival.co.uk/>; St Johns
<https://www.stjohnsbath.org.uk/> and Quartet <https://quartetcf.org.uk/>
Foundations; The Matthew Tree Project
<https://the-matthew-tree-project.org/>; Knowle West Media Centre
<https://kwmc.org.uk/>; Bristol Community Land Trust
<http://bristolclt.org.uk/>; Frome’s Flatpack Democracy
<https://www.flatpackdemocracy.co.uk/about/>.

It’s also a youthful region with leading academic centres such as
University of West of England and its Centre for Social Business, Bristol
University and its Social Economy Unit, Bath University and its Business
School, Bath Spa University and Gloucestershire University.

Bristol City’s Mayor is the first elected black Mayor in Europe and is
driving forward an exciting vision for inclusive growth. Bath and North
East Somerset council has an active approach to community partnership
involving support for asset transfer and community energy and in places
like Stroud and Gloucestershire there is a strong tradition of community
wealth building and ecological awareness. Swindon also has an emerging Swindon
Model
<https://party.coop/2018/04/26/reimagining-swindons-economy-a-community-wealth-building-promise/>
inspired
by community wealth building. The West of England region has a combined
authority bringing the possibility of coherence across a number of
authorities.

I’m hopeful that in years to come people will look to our region just as
today we admire the innovations in places like Barcelona, Quebec and Emilia
Romagna.

A transformative era of community wealth building

It’s truly exciting times for community wealth building here in the UK as
well as in the US and elsewhere across an ever more connected world. More
than ten years on from the financial crash of 2008, our revolutionary new
community cooperative banks are set to shake up the banking sector and play
a pivotal role in the flourishing of community wealth building across the
UK. Let’s ensure that we don’t miss this exciting opportunity to transform
our communities.

Please share this story with friends and join our movement. Get in touch
<jules at avonmutual.org> if you would like to get involved, support or invest
in Avon Mutual.
Register your interest in the Co-operative banking movement
<http://www.csba.co.uk/local-bank/>

Yours in cooperation
Jules Peck

FRSA
<https://www.thersa.org/discover/publications-and-articles/rsa-blogs/2017/10/building-community-wealth-in-the-banking-sector>,
Founding Director Avon Mutual <https://avonmutual.org/> Bank, Research
Fellow Democracy Collaborative's Next System Project
<https://thenextsystem.org/jules-peck>, Board member New Economics
Foundation <http://neweconomics.org/>, Trustee Sanitation First
<http://sanitationfirst.org/>.

m: 00 44 7920844802 https://www.linkedin.com/in/jules-peck-72604933/
<https://www.linkedin.com/in/jules-peck-72604933/>
'*Aspire not to have more but to be more'* Archbishop Oscar Romero - or as
Yoda put it '*Do or do not - there is no try.*'

-- 
Check out the Commons Transition Plan here at: http://commonstransition.org

P2P Foundation: http://p2pfoundation.net  - http://blog.p2pfoundation.net

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