The Shift to Sustainable, Ethical & Public Banks 

12 year old Canadian student Victoria Grant explains the fraud perpetrated by big banks on people
Whoever controls the volume of money in our country is absolute master of all industry, and commerce … and when you realize that the system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation, and depression originate. 

- President James Garfield July 2, 1881

Large too-big-to-fail banks now dominate the global landscape and are one of the central causes of the inequitable economics.


Contrary to popular belief, their large size does not give them more economy-of-scale. Rather, they are quite disconnected to their customers and no amount of advertising can hide this reality. Large banks do not have personal relationships with small business clients and therefore err on the side of conservatism, resulting in low loan rates for critical small business startups.

Background of the Banking System

Central Banks

Central banks lay at the heart of the multi-dimensional economic, energy, environmental and social crisis society now faces. Once we begin to understand the history and mechanics of how the current debt-based and central-bank monetary system was created:

we can easily see how we have come to live under the domineering control of the current economic system and why we, the 99% will continue to be powerless to do the right things for both the environment and people as long as we do not reform it.


When banks first began, bank notes were  issued as promissory notes for assets that the bank held for you in safekeeping.  It was effective because it was a lot easier than carrying around a bunch of gold, and you can give that note to somebody else knowing exactly how much it’s worth.

It turned out that most people did not take their money out of the bank. It wasn’t long after this observation that bankers began to see an opportunity for creating wealth for themselves by issuing more promissory notes than assets.  There was always some segment of society that did not have assets, yet wanted to produce goods or services. Since most people did not take their assets out of the bank, the bankers figured out that they could actually produce more promissory notes than the assets they represented and use these to make loans to people. As long as the public did not catch on, they could issue a lot of these promissory notes. Soon, it was discovered that they shouldn’t exceed a ratio of 9:1.

This system worked well as long as account holders didn’t try to cash in the notes all at once (something called a Bank Run). If they did, there would not be enough assets to pay back all account holders and their fraud would be exposed.  Bankers justified their high interest charges through a social development argument: if loanees were putting that money towards something useful  such as a factory or a business they’ll be improving the society and make enough money to give it back to you.

This seemed to work well for awhile but sometimes, people lost  faith in the local banks for a variety of reasons including corruption, too many bad loans or even just a rumor. This caused a bank run and everyone wanted to withdraw all their real assets at once. However, since the bank used the fractional reserve scheme, it could not give them all of their money at once, so the entire financial system collapses.

The Tattered History of the Central Bank System

The bold effort the present [Bank of the United States] had made to control the government, the distress it had wantonly produced … are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution or the establishment of another like it.

- President Andrew Jackson

Unknown to most people, central banks such as the Federal Reserve Bank of the United States have a long and tattered history. Before finally taking hold permanently, private central banks tried many times before. The privately held “Bank of the United States” existed from 1816 to 1836 before it was abolished by president Andrew Jackson, who saw through the harm that such control perpetuated.

“In the early years of the Republic … Jefferson opposed Alexander Hamilton’s scheme for the First Bank of the United States, and Andrew Jackson abolished Nicholas Biddle’s Second Bank of the United States.”  – Senator Goldwater.

America heeded president Jackson’s warning for the remainder of the century but the tide began to turn when powerful European and U.S. banking interests joined forces through America’s money barons, such as J.P. Morgan, John D. Rockefeller, and Bernard Baruch.

In 1902, the plot to create a central bank in the United States began anew (this time driven by European interest) with the arrival of a German banker named Paul Warburg on American soil.  Warburg was actually an associate of the Rothschilds and became a partner in Kuhn, Loeb, and Company, headed by Jacob Schiff. This was more than coincidental as the Schiffs also had ties to the Rothschilds, which went back about a century. Warburg began to lecture widely on the need for a central banking system. As you will see, the history of central banks is the history of the 1%. It is the history of how a few wealthy families have engineered a system to propagate their wealth and a system of inequity in perpetuity.

The international bankers became impatient over the unwillingness of congress to accept a central bank and hatched a scheme, the Problem-Reaction-Solution formula to accelerate the process.  Wall Street deliberately created a problem. J.P. Morgan manufactured a harmful rumor about a rival bank which had the reaction of a snowballing bank run panic which forced congress to come up with a solution – to create a  central banking system controlled by private interests. This was done to eliminate competition and to seize control of the country through the creation of the Federal Reserve System.

The Panic of 1907 was artificially triggered to elicit public acceptance of this idea. 

- James Perloff

J. P. Morgan was seen as an old hand at creating artificial panics. After J.P. Morgan spread a rumor about the insolvency of the Trust Company of America,  it had its intended effect of snowballing bank runs. ” “Tragedy is the mother of new directions. The Panic of 1907 spawned the Federal Reserve.” wrote Perloff.

Perloff described the Money Trust as, Wall Street monopolists such as Rockefeller, Morgan, Warburg, and Schiff. The entire scheme was planned with meticulous detail:

  • Heading the National Monetary Commission was Senator Nelson Aldrich, who was under the control of the international bankers
  • “Aldrich was known as the international bankers’ mouthpiece on Capitol Hill,” – James Perloff
  •  Senator Robert Owen, a co-author of the Federal Reserve Act, (who later deeply regretted his role), testified before a Congressional Committee that the bank he owned received from the National Bankers’ Association what came to be know as the Panic Circular of 1893. It established: ‘You will at once retire one-third of your circulation and call in one-half of your loans.'”
  • On April 25, 1949, Life Magazine ran an article entitled, Morgan The Great. In this article, Frederick Lewis Allen wrote “certain chroniclers have arrived at the ingenious conclusion that the Morgan interests took advantage of the unsettled conditions during the autumn of 1907 to precipitate the panic, guiding it shrewdly as it progressed so that it would kill off rival banks and consolidate the preeminence of the banks within the Morgan orbit.” This deliberately created caused a predictable panic, which forced congress to create a commission to investigate other banking options, which resulted in the Federal Reserve (solution).
  • The commission spent about two years studying central banks in Europe, and finally the “Federal Reserve became law in December 1913,” – James Perloff
  • The solution was drafted at Morgan’s hunting club on Jekyl (sic) Island off the coast of Georgia
  • Frederick Lewis Allen wrote that the Fed was drafted on Jekyl Island in Georgia by:
    • Senator Nelson Aldrich;
    • Henry P. Davison of J. P. Morgan and Company;
    • Frank A. Vanderlip, President of the Rockefeller-owned National City Bank;
    • A. Piatt Andrew, Assistant Secretary of the Treasury;
    • Benjamin Strong of Morgan’s Bankers Trust Company;
    • [Rothschild representative] Paul Warburg.”
  • The ‘Fed,’ … is allied with the Bilderberg group, which is composed of the world’s biggest moneychangers–led by the Rockefellers and Rothschilds. – Tucker
  • In a Congressional Record dated, December 22, 1913, vol. 51, Congressman Charles Lindberg declared, “The Money Trust … caused the 1907 panic, and thereby forced Congress to create a National Monetary Commission.”

Figure 1: The Money Trust  behind the Federal Reserve

The naming of this bank as the Federal Reserve was another well thought out technique of semantic deception; there is no reserve, nor is it federal. The Federal Reserve is privately owned, it makes its own polices and is not subject to even the president or congress. Most US citizens probably think that the Federal Reserve System is one of the branches of the federal government and most think that it is part of the Treasury Department due to the intentionally misleading term ‘Federal’ in its name. This is no accident but is a psychological ploy to con the Americans into accepting their deception. It is not ‘Federal’ and there is no ‘Reserve.’

The central bank is authorized to create money and to inflate at will. According to the constitution, only Congress may issue money or regulate its value. The Federal Reserve Act, however, placed these functions in the hands of private bankers to their perpetual profit.

Federal Reserve board members serve 14-year terms and are appointed by the president and since these positions control the entire economy of the country they are far more important than cabinet positions.  He continued, These appointments which should be extensively debated by the Senate are routinely approved and the results are ever-increasing debt requiring ever-increasing interest payments, inflation and periodic scientifically created depressions and recessions.

Senator Goldwater wrote, “The accounts of the Federal Reserve System have never been audited. It operates outside of the control of Congress and through its Board of Governors manipulates the credit of the United States.”

Large Private Banks

Today, many of the large private banks that make up the central bank take the hard earned money of ordinary citizens, in the way of pension and other funds and have created a non-sensible, fantasy-land called the Derivatives market which is estimated to be worth 600 Trillion dollars, while the entire real, productive world economy is actually only 10% of that. When account owners deposit money in banks and these banks use our funds to gamble in the high stakes derivatives market,  when they lose their gambles, they don’t have enough collateral to cover their bet and the government (ie. the public) is asked to come in to bail them out. Hence we have the most intolerable situation, no better than theft, in which the largest private banks in the world gamble with our money. When they win, only the elite bankers share the spoils and when they lose, the public must foot the bill.

As private bank losses make the news daily, the public is beginning to recognize the greed written into the very DNA of these  too-large-to-fail banks and looking for more sustainable alternatives.


Bank reform is happening and there is a host of new banks which are for the people, from Public banks, to state banks to sustainable banks.

If we want to be the change we want in the world, we must start by knowing where our hard earned money is going. There is approximately 60 trillion dollars in the real productive economy and over 600 trillion dollars in the imaginary derivatives market. What’s the relationship between these two pools of money?….YOU, the investor!

If you have you hold a savings or chequing account in an unethical bank (ie. typical large bank) or in a typical pension or mutual fund, your money is probably hard at work directly or indirectly financing most of the unsustainable things in the world today including:

  • fostering inequity,
  • paying the bonuses of CEO’s of large financial institutions
  • paying for big dam or mining projects,
  • financing the arms industry
  • supplying funds for individuals in the  financial industry to gamble and profit in the fantasy 600 trillion dollar derivatives market

Take responsibility of your own money; know where it is going. By not knowing, you may be inadvertently investing in the very unethical things you are trying to fight against. If you discover that this is the case, then pull it out your assets and deposit or invest them in an ethical financial institution.

Public Banks

Public Banks are one of the solutions which monetary reform Advocate Ellen Brown, author of Web of Deceit suggests as the way to rid the world of greedy central banks once and for all.

Brown claims that if the US government ousted the cartel of private banks called the “Central Bank” and took over the manufacture of money, it could:

  • Keep the interest and get  projects financed at half price
  • Double the number of projects they could afford, without costing the taxpayers a single penny more than we are paying now
  • Fund all sorts of things we think we can’t afford now, simply by owning their own banks
  • Fund something Franklin D. Roosevelt and Martin Luther King dreamt of—an Economic Bill of Rights
  1. Governments—state and federal—could bypass the interest set up by big banks by setting up their own publicly-owned banks
  2. Banking would become a public utility, a tool for promoting productivity and trade rather than for extracting wealth from the debtor class
  3. Congress could reclaim the power to issue money from the banks and fund its budget directly
  4. It could do this without changing any laws.  Congress is empowered to “coin money,” and the Constitution sets no limit on the face amount of the coins.  Congress could issue a few one-trillion dollar coins, deposit them in an account, and start writing checks.
  5. The Fed’s (in other words, the big banks) own figures show that the money supply has shrunk by $3 trillion since 2008
  6. That sum could be spent into the economy without inflating prices.
  7. Three trillion dollars could go a long way toward providing the jobs and social services necessary to fulfill an Economic Bill of Rights
  8. Guaranteeing employment to anyone willing and able to work would increase GDP, allowing the money supply to expand even further without inflating prices, since supply and demand would increase together

Other governments of the world could achieve the same result by replacing greedy central banks with a public bank.

The Public Banking Institute is an organization that advocates the re-establishment of Public Banks.

Public Banks are …

  • Viable solutions to the present economic crises in US states.
  • Counter-cyclical, meaning they extend credit precisely when private banks contract credit, creating a “soft” landing.
  • Potentially available to any-sized government or community able to meet the requirements for setting up a bank.
  • Owned by the people of a state or community.
  • Economically sustainable, because they operate transparently according to applicable banking regulations
  • Able to offset pressures for tax increases with returned credit income to the community.
  • Ready sources of affordable credit for local governments, eliminating the need for large “rainy day” funds.
  • Required to promote the public interest, as defined in their charters.
  • Constitutional, as ruled by the U.S. Supreme Court

Public Banks are not…

  • Operated by politicians; rather, they are run by professional bankers.
  • Boondoggles for bank executives; rather, their employees are salaried public servants (paid by the state, with a transparent pay structure) who would likely not earn bonuses, commissions or fees for generating loans.
  • Speculative ventures that maximize profits in the short term, without regard to the long-term interests of the public.

Advantages of Public Banks

(Source: Public Banking Institute Advantages page)

Cut spending, raise taxes, sell off public assets – these are the unsatisfactory solutions being debated; but the states’ budget crises did not arise from too much spending or too little taxation. It arose from a credit freeze on Wall Street. In the wake of the 2009 financial market collapse, banks curtailed their lending more sharply than in any year since 1942, driving massive unemployment, which caused local tax revenues to plummet.

The logical solution, then, is to restore credit to the local economy. But how? The Federal Reserve could provide the capital and liquidity necessary to create bank credit, in the same way that it provided $12.3 trillion in liquidity and short-term loans to the large money center banks. But Fed Chairman Ben Bernanke declared in January 2011 that the Fed has no intention of doing this — not because it would be too costly (the total deficit of all the states comes to less than 2% of the credit advanced for the bank bailout) but because it is not part of the Fed’s mandate. If Congress wants the Fed to advance credit to local governments, he said, it will have to change the law.

The states are on their own. Policymakers are therefore considering a variety of reforms designed to increase bank lending, particularly to small businesses, the hardest hit by tightening credit standards. One measure that is drawing increasing interest is the creation of a bank modeled on the Bank of North Dakota (BND), currently the only state-owned bank in the country. The BND has a 92-year history of safe, secure and highly profitable banking. North Dakota has the lowest unemployment rate in the country; and in 2009, when other states were floundering, it had the largest budget surplus it had ever had.

Fourteen states now have introduced bills either to form state-owned banks or to do feasibility studies to determine their potential. This year, bills were introduced in the Oregon State legislature on January 11; in Washington State on January 13; in Massachusetts on January 20 (following a 2010 bill that lapsed); in Arizona on January 24th; in the Maryland legislature on February 4; in New Mexico on February 16th; in California on February 17th (amended on March 31st); Montana on March 26th; New York on March 28th; and in Maine, on April 12th. They join Illinois, Virginia, Hawaii, and Louisiana, which introduced similar bills in 2010. The Center for State Innovation, based in Madison, Wisconsin, was commissioned to do detailed analyses for Washington and Oregon. Their conclusion was that state-owned banks in those states would have a substantial positive impact on employment, new lending, and state and local government revenue.

State-owned banks could be a win-win for virtually everyone. Objections are usually based on misconceptions or a lack of information. Proponents stress that:

1. A state-owned bank on the BND model would not compete with community banks. Rather, it would partner with them and support them in making loans. The BND serves the role of a mini-Fed for the state. It provides correspondent banking services to virtually every financial institution in North Dakota and offers a Federal Funds program with daily volume of $330 million. It also provides check clearing, cash management services, and automated clearing house services. It leverages state funds into credit for local purposes, funds that would otherwise leave the state and be leveraged for investing abroad, drawing away jobs that could go to locals.

2. The BND not only does not compete for loans but does not compete for commercial deposits. Less than 2% of its deposits come from consumers, and municipal government deposits are also reserved for local community banks, which are able to use these funds for loans specifically because the BND provides letters of credit guaranteeing them. Virtually all of the BND’s deposits come from the state itself. All state revenues are deposited in the BND by law.

3. Although the BND is a member of the Federal Reserve System, it is insured by the state rather than by the FDIC. This does not, however, put depositors at risk. Rather, it helps avoid risk and unnecessary expense, since the BND’s chief depositor is the state, and the state has far more to deposit than $250,000, the maximum covered by FDIC insurance. FDIC insurance is not only very expensive but subjects members to FDIC regulation, making the state subservient to a semi-private national banking association. (The FDIC calls itself an independent agency of the federal government, but it receives no Congressional appropriations. Rather, it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities.) North Dakota prefers to maintain its financial independence.

4. BND officials stress that the bank is run by bankers, not politicians bent on funding their favorite development projects or bestowing political favors. The bank is run very conservatively, doing only creditworthy deals and avoiding speculation in derivatives and risky subprime loans. By partnering with local banks, the BND actually shields itself from risk, since the local bank takes the initial loss if the borrower fails to pay.

5. The BND does not imperil state funds or tax money but is self-funding and self-sustaining. It keeps federally-guaranteed funds in the state that would otherwise go elsewhere, including VA and FHA loans and low-income subsidies. Profits on these federally-guaranteed loans can then be used to build a capital surplus from which riskier loans can be made to local businesses. The BND has a return on equity of 25-26% and has contributed over $300 million to the state (its only shareholder) in the past decade — a notable achievement for a state with a population less than one-tenth the size of Los Angeles County. Compare California’s public pension funds, which entrust their money to Wall Street and are down more than $100 billion, or close to half the funds’ holdings, following the banking debacle of 2008.

6. Partnering with the BND allows community banks to fund local projects in which Wall Street is not interested, leveraging municipal government funds that would otherwise not be available for loans. Further, infrastructure projects can be funded through the state bank at substantially less cost, since the state owns the bank and gets the interest back. Studies have shown that interest composes 30-50% of public projects.

7. The North Dakota Bankers’ Association does not oppose the BND but rather endorses it. North Dakota has the most local banks per capita and the lowest default rate of any state.

  • If modeled on the successful Bank of North Dakota, Partnership Banks in other states would:
  • Create new jobs and spur economic growth. Partnership Banks are participation lenders, meaning they partner—never compete—with local banks to drive lending through local banks to small businesses. If Washington State had a fully-operational Partnership Bank capitalized at $100 million during the Great Recession, it would have supported $2.6 billion in new lending and helped to create 8,212 new small business jobs. A proposed Oregon bank could help community banks expand lending by $1.3 billion and help small business create 5,391 new Oregon jobs in its first three to five years. All of this would be accomplished at a profit, which Partnership Banks should share with the state.
  • Generate new revenues for states directly, through annual bank dividend payments, and indirectly by creating jobs and spurring local economic growth. The table above shows projected dividends for established Partnership Banks in the states considering such proposals, based on BND’s 2009 dividend payment to North Dakota’s General Fund.
  • Lower debt costs for local governments. Like the Bank of North Dakota, Partnership Banks can get access to low-cost funds from the regional Federal Home Loan Banks. The banks can pass savings on to local governments when they buy debt for infrastructure investments. The banks can also provide Letters of Credit for tax-exempt bonds at lower interest rates, or help a city or the state itself issue a new bond at an interest rate lower than it could otherwise get in the open market, or buy bonds already issued and traded on the bond market, with interest payments simply diverted to the state.
  • Strengthen local banks even out credit cycles, and preserve real competition in local credit markets. There have been no bank failures in North Dakota during the financial crisis. BND’s charter is clear that its goal is to “be helpful to and to assist in the development of [North Dakota banks]… and not, in any manner, to destroy or to be harmful to existing financial institutions.” By purchasing local bank stock, partnering with them on large loans and providing other sup- port, Partnership Banks would strengthen small banks in an era when federal policy encourages bank consolidation.
  • Build up small businesses. Surveys by the Main Street Alliance in Oregon and Washington show at least 75 percent sup- port among small business owners. In markets increasingly dominated by large corporations and the banks that fund them, Partnership Banks would increase lending capabilities at the smaller banks that provide the majority of small business loans in America.

North Dakota – a Shining Example of the Success of Public Banks

The concept of a State bank is that the states use their own funds as a reserve to create their own bank and make loans to make infrastructure growth and business development in their own state. It differs from commercial banks in that it would finance the critically important long term projects that commercial banks currently do not.  As the only state-owned bank in the nation the Bank of North Dakota (BND) acts as a funding resource in partnership with other financial institutions, economic development groups and guarranty agencies. BND has four established business areas: Student Loans, Lending Services, Treasury Services and Banking Services.


North Dakota is the poster child of public banking. It has had a State bank operating since 1919 and North Dakota is characterized by:

  • low unemployment rates
  • one of the few state budgets that is balanced in the entire United States

The tradition goes back to colonial times. Benjamin Franklin attributed success of Pennsylvania to the Pennsylvania state bank. Interest is collected at much lower rates than a commercial bank and the profits go right into the state budget.

By creating a state or public bank, the state reaps all the benefits of loaning out its money instead of private financial institutions:


Figure 1: Current Private vs State or Public Banking System (Source: In Context)

Other states can replicate North Dakota’s success. All states have a backup or emergency fund called a Rainy day Fund. They may get a low rate of return on this fund; typically 1% to 2%. California, for example has a $70 billion dollar Rainy Day fund. States could effectively use this as the reserve in the current fractional reserve system. This would take a lot of funds out of the globally destructive derivatives market, where only financial companies gain and put it to good use for the people of each state.

Although we are talking about states within the United States in this example, there is no reason in principle why the same system could not be applied  to states and provinces in other countries around the world.

The Growth of Public Banking

In 2012, forty-eight states within the United States have budget shortfalls. The common strategy to deal with these shortfalls is to cut budgets which has two effects:

  1. it eliminates important safety nets for the middle-class and those below the poverty line
  2. it repeals legislation guaranteeing collective bargain rights for unions

In doing this, the government acts like private corporations acting NOT in the interest of its people.


In spring of 2010, North Dakota was also the only state in the US that had a major budget surplus; it had the lowest unemployment and default rates in the country; and it had the most community banks per capita, demonstrating that the presence of a state-owned bank has helped, not hurt, the local banks. Other states are now looking at the North Dakota model resulting in the beginning of a major paradigm shift.

Public awareness of the advantages of Public Banking has grown to such an extent that:

  • 18 states have have introduced legislation for:
  • publicly owned banks or derivations
  • or for studies
  • or task forces to determine how a publicly owned bank would operate in their jurisdiction
  • three of these states have bills that were submitted in 2012
  • 11 states had bills submitted in 2011
  • Colorado has an innovative initiative

Sustainable Banks

Recognizing the hole in the marketplace, a new breed of sustainable and ethical banks are emerging to meet the demands of sustainable investors. Triodos is a UK-based which is leading the pack.

Triodos Bank caters to the 99%. Their mission is to make money work for positive social, environmental and cultural change. More specifically, their mission statement is to:

  • help create a society that protects and promotes the quality of life of all its members
  • enable individuals, organisations and businesses to use their money in ways that benefit people and the environment, and promote sustainable development
  • provide our customers with innovative financial products and high quality service

Triodos only lends to and invests in organisations that benefit people and environment. Triodos connect savers and investors who want to change the world for the better with entrepreneurs and sustainable companies doing just that.  They are the only specialist bank to offer integrated lending and investment opportunities for sustainable sectors in a number of European countries.

Triodos finances organisations ranging from organic food and farming businesses and pioneering renewable energy enterprises, to recycling companies and nature conservation projects.

Core Activities

1. Sustainable service provider

Triodos provides products and services that support sustainable development at competitive prices and a professional service. By doing this, Triodos has created a broad customer base – a powerful international community of individuals, businesses and organisations with a shared desire for positive social, cultural and environmental change.

2. Product innovator

Triodos is constantly working to develop innovative new products, which is available both directly through Triodos Bank and also via third parties. In The Netherlands, for example, a range of sustainable Triodos investment funds is now offered to the general public by other banks – and achieving rapid growth, as a result.

  • Banking services
  • Fund management
  • Project development
  • Investment management
  • Venture capital funds
  • Corporate finance
  • Private banking
Organic Farming
Triodos Bank finances the entire organic food chain, from producers and processors to retailers and restaurants.
Ian Price  is Triodos organic expert, and has financed hundreds of organic food and farming businesses since joining Triodos in 2005. Ian has over thirty years banking expertise, including three years spent providing financial services to marginalised communities in the West Midlands.
Alternative Energy
Triodos offers shares in Triodos Renewables as a great way to activate money and reap financial, social and environmental rewards. Triodos Bonds offer a way to commit to putting money to work helping a wide range of ethical, sustainable projects.
Steve Moore is a Troidos renewable energy expert who has focused on renewable energy lending since joining Triodos in 2002, following 15 years of commercial banking experience. Over the past seven years he has played a significant role in the financing of over 25 onshore wind farms and 10 hydro-electric projects in the UK and Ireland.

3. Opinion leader

Triodos plays a role in stimulating and leading public debate on issues including quality of life, social and environmental development, and sustainable banking.

Our banking industry has an unprecedented opportunity to change, to help meet some of the greatest social and environmental issues of our time

- Peter Blom, GABV Chair and CEO of Triodos Bank

The Global Alliance for Banking on Values (GABV) is an independent network of banks using finance to deliver sustainable development for unserved people, communities and the environment.It is made up of twenty of the world’s leading sustainable banks, from Asia, Africa, Latin America to North America and Europe. Members include:

  • microfinance banks in emerging markets,
  • credit unions,
  • community banks
  • sustainable banks financing social, environmental and cultural enterprise


All member banks comply with sustainable banking principles and have a shared commitment to find global solutions to international problems – and to promote a positive, viable alternative to the current financial system. These organisations believe that we must improve the quality of life for everyone on the planet, recognising that we are economically interdependent and responsible to current and future generations.

The network’s members have to meet three criteria:

  • they are independent and licensed banks with a focus on retail customers
  • with a minimum balance sheet of $50 million;
  • and, most significantly, they should be committed to social banking and the triple bottom line of people, planet and profit.

The Global Alliance for Banking on Values works with key partners to further its work including:

  •  FMO, the development bank of the Netherlands
  • the Rockefeller Foundation, who co-fund its financial capital and impact metrics action track
  • SBI who deliver services and solutions that extend access to capital to un(der)served individuals, households and entrepreneurs globally

2012 Report shows Sustainable Banks outperform World’s Largest Private Banks

The Global Alliance for Banking of Values  has just released its March 2012 report Strong, Straightforward and Sustainable Banking that shows a compelling case for value-added banking.

Commissioned by the Global Alliance for Banking on Values(GABV), a network of 15 of the world’s leading sustainable banks, and funded by the Rockefeller Foundation and GABV, the report compared the performance of 17 values-based banks with 29 of the world’s largest and most influential banks between 2007 and 2010 in an effort to show the benefit that sustainable banks can have on underserved people. The report shows that sustainable banks have outperformed the world’s largest private bank (including Bank of America, JP Morgan, Barclays, Citicorp and Deutsche Bank). This new breed of banks base their decisions on the needs of people and the environment.

The findings are crucial for a global banking industry which has tremendous potential to affect positive change through its ability to lend money to finance entrepreneurs and stimulate local economies. And, most importantly, it shows that a sustainable approach to banking offers all of us the prospect of a stable, prosperous future.

- Peter Blom, GABV Chair and CEO of Triodos Bank

They are outperforming traditional mainstream banks in many areas, including:

  • financial indicators such as return on assets, growth in loans and deposits
  • capital strength

Sustainable banks were found to:

  • be twice as likely to invest their assets in loans, lending more than 70% of their assets during the period under study on average
  • be stronger financially with both higher levels of, and better quality, capital
  • have a higher solvency. BIS 1 Ratio is an important measure of a bank’s solvency and averaged over 14% during the period studied, compared with under 10% for the mainstream banks
  • have a higher average Equity/Asset ratio – over 9% while the GSIFI banks averaged just over 5% during the period covered
  • deliver higher financial returns than some of the world’s largest financial institutions. Return on Assets, the measure increasingly considered most relevant for judging a bank’s financial performance, averaged above 0.50% while the big banks earned an average of just 0.33%.
  • have higher returns on equity – averaging 7.1%, compared to 6.6% for the GSIFI banks