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Policy news & blueprints for the transition to a new Sustainable and Social Economy
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European Union's Banking Union Can Work

European Union's Banking Union Can Work | The Great Transition | Scoop.it
It won't be easy, but the half-baked idea of a banking union can be turned into something useful if the European Central Bank follows certain steps.
Willy De Backer's insight:

Question is not if it would work. Question is if Europe's citizens really need it. Why not a citizens' union or a social union? Banking union shows where EU elites have their priorities

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It’s the interest, stupid! Why bankers rule the world

It’s the interest, stupid! Why bankers rule the world | The Great Transition | Scoop.it
In the 2012 edition of Occupy Money released last week, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest.

 

The case for a public banking systems which re-invest its profits in prosperity instead of high bonuses.

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The Upside of Default

"... in any given year, maybe one per cent of the financial economy has anything to do with the production of real, nonfinancial goods and services.

 

The rest? It consists of ways to make money from money. That seems innocuous enough, until you remember what money actually is. Money is not wealth; it’s a system of abstract, culturally contrived tokens that we use to manage the distribution of real goods and services. A money system can simplify the process of putting energy, raw materials, labor, and other goods and services to work in productive ways; that’s the reason we have money, or rather the reason most of us are prepared to discuss in public. That’s not what the other 99% of the world’s financial assets are doing, though. They are there to ensure that the people who own them have disproportionate, unearned access to real, nonfinancial goods and services."

 

John Michael Greer's brilliant analysis of the current financial crisis with some very valid lessons and predictions for the Eurozone. Must-read.

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MIT Economist: Big Banks Have 'Hijacked' The Political Process

MIT Economist: Big Banks Have 'Hijacked' The Political Process | The Great Transition | Scoop.it
A prominent economist says big banks have "hijacked" the political process and now have "a leading driver's seat" in determining financial regulation.

 

Daron Acemoglu (author of "Why nations fail") explains in this short article in the Huffington Post how the financial elites have eroded democracy.

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Europe proposes banking union to ease debt crisis

As Europe's debt crisis intensifies, top officials say the continent urgently needs a central authority with the financial muscle to fix its broken banks.

 

The flight forward for EU leaders: a "banking union". Finally full recognition that THIS European "Union" has always been a Europe for capital, never for labour and citizens. As long as things went well, we got the crumbs from the tables of the rich, now they send us back to the poor houses and debtors' prisons.

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Credit is What Credit Does: Finance and Economic Growth Uncoupled

Credit is What Credit Does: Finance and Economic Growth Uncoupled | The Great Transition | Scoop.it

“Most of our credit system does not support economic growth in the sense of supporting transactions in goods and services,” he explains. “Most of our finance system, most bank loans, support increased asset prices, which have a number of detrimental effects on the economy.”

 

"The threat to growth today is not a shrinking of the financial sector, but it enormous size.”

 

Must-read article on the web site of the Institute for New Economic Thinking.

 

 

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How Wall Street Killed Financial Reform

How Wall Street Killed Financial Reform | The Great Transition | Scoop.it
It's bad enough that the banks strangled the Dodd-Frank law. Even worse is the way they did it - with a big assist from Congress and the White House.

 

Brilliant article in Rolling Stone on the financial terrorism of Big Business. Compared to these fundamentalists, Bin Laden was peanuts.

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Nassim Taleb: How to prevent other financial crises?

This article argues that the crisis of 2007–2008 happened because of an explosive combination of agency problems, moral hazard, and “scientism”—the illusion that ostensibly scientific techniques would manage risks and predict rare events in spite of the stark empirical and theoretical realities that  suggested otherwise. The authors analyze the varied behaviors, ideas and effects that in combination created a financial meltdown, and discuss the players responsible for the consequences. In formulating a set of expectations for future financial management, they suggest that financial agents need more “skin in the game” to prevent irresponsible risk-taking from continuing.

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Carbon bubble: Bank of England's opportunity to tackle market failure

Carbon bubble: Bank of England's opportunity to tackle market failure | The Great Transition | Scoop.it
Ben Caldecott and James Leaton: Bank's willingness to consider fossil fuel exposure as a risk to financial stability will serve as an important test of whether anything has been learned from the sub-prime crisis...

 

Interesting development in the financial sector in the UK.

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Finance should be our servant not our master

Finance should be our servant not our master | The Great Transition | Scoop.it
Thoughtful stewardship is key to re-engineering a more sustainable investment system, says Mark Goyder...

 

Some good examples of potential instruments to transform the financial sector for long-term sustainability in this article on the Guardian's Sustainable Business blog.

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Bank says no? Ditch the bank – borrow from the crowd

Bank says no? Ditch the bank – borrow from the crowd | The Great Transition | Scoop.it
Traditional banks have failed us.Will online peer-to-peer lending rescue our personal finances, asks MacGregor Campbell...

 

New Scientist has this very interesting but also critical article on citizens' banking.

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It's time for a local banking system

It's time for a local banking system | The Great Transition | Scoop.it
Tony Greenham: We need banks that focus on the real economy, individuals and small business, not speculation and remote investments...

 

This article in the Guardian makes a lot of sense, but then again "going local" might be the new fashion in sustainability thinking but is not always without its problems and challenges too. What we ultimately will need is a fundamental reform of the role and functioning of ALL banks in society.

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Making Money for Business: Currencies, Profit, and Long-Term Thinking

Making Money for Business: Currencies, Profit, and Long-Term Thinking | The Great Transition | Scoop.it

Belgian banking and currency expert Bernard Lietaer and community developer Gwendolyn Hallsmith present some of their stimulating ideas on how to re-engineer our monetary systems for the sustainability revolution.

 

A bit technical and out-of-the-box but the kind of innovative thinking that we will ultimately need. Much more realistic than the mumbo-jumbo presented by EU leaders as the "historical" solution for Europe.

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The power to 'create money out of thin air'

The power to 'create money out of thin air' | The Great Transition | Scoop.it

"If we can move on from Adam Smith’s 300 year-old flawed analytical system to a proper understanding of the powers and public goods we have, due to ignorance, outsourced to the private banking sector – then perhaps as both economists and citizens we might finally be able to understand the creation of money – by both central and private banks - ‘out of thin air’. Only with this understanding will it be possible to devise policies, regulation and strategies to tackle and once again subordinate global finance to the interests of society and the ecosystem."

Willy De Backer's insight:

Brilliant but sometimes a bit technical review by Ann Pettifor of the role of money and credit in the current economic crisis. Must-read article for anyone interested in how to tame the financial sector.

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Suddenly, quantitative easing for the people seems possible

Suddenly, quantitative easing for the people seems possible | The Great Transition | Scoop.it
As some of the world’s top central bankers start to admit that standard quantitative easing is failing to generate growth, previously taboo ideas can be mentioned, including QE for the People, discussed here last week.

 

Interesting and provocative ideas from financial economist Anatole Kaletsky (author of "Capitalism 4.0"). Give the new money created by central banks to the people instead of the banksters.

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Should Banks be Ethical, Sustainable and Boring?

Should Banks be Ethical, Sustainable and Boring? | The Great Transition | Scoop.it

Ensuring that banks are boring may prove to be a key element of a new business model for the banking sector, enabling the sector to re-establish its ethical framework and focus financing on sustainability.

 

Good article on the future of banking and the financial sector in Forbes. Title is misleading in my view: what is boring about working for real value and the real economy?

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lelapin's comment, July 22, 2012 5:04 AM
Having boring associated with ethical and sustainable in same sentence creates, in my humble opinion, a link that I find not very sound, unless you'd find unethical and unsustainable exciting.
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Not waiving but drowning

"Although the Barclays scandal has pushed the Eurozone crisis off the front pages this morning, the two are intimately related. As the previous post on this blog indicated, the sovereign debt crises have also arisen as a result of banks bidding up the rates of interest paid by nations on the money they borrow from those banks, increasing bank profits while bankrupting countries and destroying their societies. As in their mainpulation of the LIBOR rate they have controlled what is supposed to be a free market to benefit their narrow interests, and the whole economy and wider society have suffered as a result."

 

Good commentary on the UK's Barclays scandal. How many more of these scandals do we need before governments understand what really needs to be done?

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Can disruptive policy create a sustainable finance system?

Can disruptive policy create a sustainable finance system? | The Great Transition | Scoop.it

"The ideas for creating a new and sustainable finance system are out there. If this thinking doesn't get greater exposure to policy makers and the media, the world of finance will remain a barrier to social and environmental progress."

 

Good analysis by Chris Hewett on the Open Democracy site.

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RBS involved in £40bn loans to fossil fuel companies in past six months

RBS involved in £40bn loans to fossil fuel companies in past six months | The Great Transition | Scoop.it
Friends of the Earth Scotland's analysis finds state-owned bank helped fund £3bn in loans for renewable energy in same period...

 

Not surprisingly big banks are lending big money to big fossil fuel companies instead of green energy. Those two sectors have most to lose from the end of casino capitalism and will resist as long as possible.

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Hollande, la finance et l’angoisse finale du banquier

Global plutocracy and the financial Fourth Reich are preparing their battle plans against Hollande win in French presidential elections.

 

Read also this week's Economist to understand how the 1% is preparing for new class war.

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Psychopaths on Wall Street

Psychopaths on Wall Street | The Great Transition | Scoop.it

Are ten percent of the people in the financial services industry psychopaths? 

 

Interesting article by a psychiatry professor in the Harvard Business Review blog.

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How the Banks Broke the Social Compact, Promoting their Own Special Interests

In The Market Oracle, economist Michael Hudson provides a brilliant analysis of the perverse role of banking in our current casino capitalism.

 

This is a must-read for anyone concerned about Europe's debt crisis.

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The dangers of demonology

The dangers of demonology | The Great Transition | Scoop.it

"The crisis of 2008 showed that global finance requires tough medicine. Banks must be forced to hold bigger reserves. “Weapons of mass destruction” must be defused. The culture of short-term incentives needs to be revised. But demonising bankers will not solve these problems—and may well, if unchecked, bring a lot of ancient ugliness back to life."

 

Interesting defense of bankers in the Economist. I agree that demonising "the bankers" is not a solution but this demonising will increase as long as  the financial sector is not being put back at the service of society. And where are the bankers leading that radical transformation?

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Europe’s Transition From Social Democracy to Oligarchy

Europe’s Transition From Social Democracy to Oligarchy | The Great Transition | Scoop.it

Another impressive analysis of the real motives behind the eurocrisis from economist Michael Hudson. First published in Germany's Frankfurter Allgemeine Zeitung.

 

"So something has to give. Will it be the past few centuries of liberal free-market economic philosophy, relinquishing planning the economic surplus to bankers? Or will society re-assert classical economic philosophy and Progressive Era principles, and re-assert social shaping of financial markets to promote long-term growth with minimum costs of living and doing business?

At least in the most badly indebted countries, European voters are waking up to an oligarchic coup in which taxation and government budgetary planning and control is passing into the hands of executives nominated by the international bankers’ cartel. This result is the opposite of what the past few centuries of free market economics has been all about."

 

More extracts of and comments on this brilliant piece later on my blog http://3eintelligence.wordpress.com

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Let's not pussyfoot around with the banks

Let's not pussyfoot around with the banks | The Great Transition | Scoop.it
A closer examination of money creation shows the need for major banking reform.

 

The New Economics Foundation's Tony Greenham makes the case for a radical change in the way banks can "create" money and the need for a fundamental banking reform.

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