Why Public Banks Outperform Private Banks: Unfair Competition or a Better Mousetrap?
by Ellen Brown
Posted February 14, 2015
Public banks in North Dakota, Germany and Switzerland have been shown to outperform their private counterparts. Under the TPP and TTIP, however, publicly-owned banks on both sides of the oceans might wind up getting sued for unfair competition because they have advantages not available to private banks.
Then what does explain it? The Bank of North Dakota (BND)turns a tidy profit year after year because it has substantially lower costs and risks then private commercial banks. It has no exorbitantly-paid executives; pays no bonuses, fees, or commissions; has no private shareholders; and has low borrowing costs. It does not need to advertise for depositors (it has a captive deposit base in the state itself) or for borrowers (it is a wholesome wholesale bank that partners with local banks that have located borrowers). The BND also has no losses from derivative trades gone wrong. It engages in old-fashioned conservative banking and does not speculate in derivatives. More…
There are more small banks per capita in North Dakota than any other state. The partnerships between the small banks and the BND has worked to the benefit of the people in North Dakota, not Wall Street.