Banking for the Great Transition

Banking is no longer serving the needs of people, or the productive economy. It is destroying the natural resources that we rely on, and the social resources that give our lives meaning and enable us to actively and appropriately respond to new challenges in a changing world.

Unless we change the way that we organise banking, the economy too will collapse, with all of the additional environmental and social damage that entails.

The Government has no more urgent matter than controlling the banks and re-building the system in which they operate. In the midst of the current crisis, we have a once-in-a-lifetime opportunity to shake-up the provision of finance in the UK, making banks serve the needs of their customers rather than provide short-term gains for shareholders and profits for themselves. This will also include ensuring targeted support for key sectors of the economy, such as the ‘green collar’ sector.

Yet, the banking sector has been quick to return to business as usual. Big bonuses are back, little of the public money used to bail out the banks has been seen re-circulating in the economy and a massive market failure has been magically transformed into a crisis of public spending leaving the banks unreformed and seemingly let off scot free.

Considering the generational impact of the banking failure, and the scale of subsequent public support given to the banks, government action to correct past systemic problems in the finance sector and to prevent future crises, has been woefully inadequate.

In a linked but separate way, considering the major new economic, social, and environmental challenges we face, the banking system we now have is not fit for purpose. To tackle recession, the urgent shift to a low carbon economy and worsening levels of corrosive social inequality will need a ‘Great Transition’. Such change is necessary, possible, and desirable. But, it will need a new finance system that is fit for purpose.

The Great Transition campaign is working with a range of partners to bring in a finance system that is fit for purpose.