the role of social banking

07.04.23 www.social-banking.org 1

The role of social banking

Katharina Beck, 02 October 2011Internazionale a Ferrara, Italy


The Institute for Social Banking

• Summer School on Social Banking

• Certificate in Social Banking

• Introduction and Expert Seminars

• Knowledge generation

Different faces of banking


Pictures: http://hookz.killing4space.de/?p=903, Zukunftsstiftung Landwirtschaft


"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...


Demonstrations on Brooklyn Bridge, „Occupy wall street“-movement, 1st October 2011, New York.

Picture taken from www.tagesschau.de


Europe


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“

Bank•Intermediary•Allocates money•Maturity transformation•Risk transformation•Information

Bank•Intermediary•Allocates money•Maturity transformation•Risk transformation•Information


Banks as „simple“ intermediaries

Those who have moneyThose who

have money

Those who need money / real

economy

Those who need money / real

economyassetasset loansloans

Basis: TRUST

2. Social Banking

A „normal“ service


Picture: Katharina Beck


Understanding money as a tool

Different qualities of money

Publication of financed projects, e.g. Triodos

07.04.23 11www.social-banking.org/summer-school

Examples for criteria



Social Banking


Multi-dimensional core business

Combining several dimensions.

Global Alliance for Banking on Values


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abv.

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Banking with the poor

Picture: Oikocredit Social Performance Report 2010, p. 3.

Micro-finance

GABV: Different approaches

Balance Sheet (2009/10) in Mio. US $ No. of Customers

ABS 898 24000Banca Etica 973 40000BancoSol 495 390000BRAC 1366 898000Cultura Bank 66 4200GLS Bank 2000 100000Integral 75 42000Merkur 290 16000Mibanco 1586 500000New Resource Bank 159 2000OnePacificCoast Bank 99 800000Triodos Bank 4311 500000Vancity 13640 750000Xac Bank 223 225000

TOTAL 26.181 4.251.20007.04.23 www.social-banking.org 18

13 GABV Banks: world

Performance of balance sheets: Europe


Comparing some monetary numbers...


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)

People seeking „sense“


Pictures: www.brandeins.de and www.yogamob.org


1. Role models / reference(long-time experience, focus on real economy and the human being, „True“ eco-social goals, participation, transparency)

2. Thought leadership (focus on relation and not transaction, proposals for regulation)

3. Values and focus on the human being(„dare to be different“)

Social banks‘ uniqueness and role

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



Money in the digital world?

Social Media

http://www.youtube.com/watch?v=ekF8Zsv5F3w

The future of money?

New currencies?

Giving and donations

Financial sector: „de-humanised“?


• 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)


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.


1. Separation of retail and investment baking2. Financial transaction tax3. Closing of tax havens4. Only allow what we can understand (simple and

transparent financial „products“).5. Make OTC public and transparent.6. Rating agencies shall be paid by financial services tax.7. Increase financial literature.8. Change incentive structures.

=> Back to „boring“ (Max Otte), human banking?

„Social Banking“ proposals for solutions

Katharina Beck

Director | Institute for Social BankingChriststr. 944789 [email protected] / 60 60 01 32

www.social-banking.org


Thank you!

Picture: Katharina Beck.The pictures belong to the Institute for Social Banking if not otherwise indicated

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?)


the role of social banking

Economy & Finance