Next, we learn that a whopping 93.3 percent of SVB deposits were uninsured, with cryptocurrency firm Circle having $3.3 billion<\/em> deposited in one account! So much bad news is emerging that the Department of Justice and the Securities and Exchange Commission have opened investigations. Additionally, Senator Elizabeth Warren, who opposed relaxing the regulations put in place after the 2008 banking crisis, has joined forces with Representative Katie Porter to sponsor legislation restoring those regulations watered down by Congress and signed by Trump.<\/p>\n\n\n
![\"Political](\"https:\/\/i0.wp.com\/eltecolote.org\/content\/wp-content\/uploads\/2023\/04\/Big-Banks_web.jpg?resize=1000%2C1000&quality=89&ssl=1\")
Tightening regulations is a good first step. However, there are still many \u201ctoo big to fail\u201d banks that know that all of their deposits<\/em>, even those beyond the $250,000 FDIC limit, will be guaranteed by the Feds in the next crisis. These megabanks benefit from the collapse of small and mid-sized banks with deposits being transferred to the big fish. Banking crises will continue to flourish if we fail to reform the culture of corporate banking, where banking CEOs and executives are awarded royal remunerations for raising share prices. Greg Becker\u2019s compensation in 2021 was over $9 million, an enormous payout for incompetent management that doesn\u2019t even include the $3.6 million he took home from selling SVB stocks shortly before the bank\u2019s demise.<\/p>\n\n\n\n In addition to restoring and enforcing banking regulations aimed at countering the avaricious culture of banking, it is time to reform the entire financial system. With 563 federally insured bank failures since 2008 and more pending, we cannot assert that the American financial system is stable or trustworthy. For this reason, folks across the nation are advocating the establishment of public banks modeled after the great American public bank, the Bank of North Dakota (BND), which has reliably served the financial needs of North Dakota residents for over 100 years. The BND has safely held all of the state\u2019s public funds and returns profits to the state\u2019s treasury. It supports local investment by co-lending with community banks and credit unions on public interest projects. It even offers student loans at below-market rates to the state\u2019s residents. <\/p>\n\n\n\n Public banks, like the BND, do not seek ballooning profits or reward their executives with exorbitant compensation. They see financial services as a public utility that is meant to improve the lives of residents. Public banks operate in concert with local community banks and credit unions to effectively provide loans to small and medium-sized businesses that the megabanks cannot be bothered with. They can fund energy-efficient affordable housing, small business support, and infrastructure improvements responsive to the climate crisis. All badly needed in San Francisco. <\/p>\n\n\n\n With public banks, financial services can be equitably and economically provided to counter the current narrative that overpaid banking executives in megabanks are the only ones who can manage our complex economy despite frequent bank crises. In San Francisco, the East Bay, Los Angeles, and Sacramento, public banking advocates are working to start municipal banks in accord with the state\u2019s Public Banking Act, which was signed into law in 2019. <\/p>\n\n\n\n A new and improved national financial architecture that includes ample space for responsible municipal, state and federal public banking is needed to halt the cycle of bank failures and government bailouts to bankers that have now become routine. <\/p>\n","protected":false},"excerpt":{"rendered":" United States Senator Hiram Johnson said: \u201cThe first casualty when war comes is truth.\u201d We can easily extend this aphorism to the fallout from bank failures where truth is an early casualty amid the ensuing turmoil. Case in point: Silicon Valley Bank. Immediately following the forced closure of this California-based bank, formerly the 16th largest […]<\/p>\n","protected":false},"author":35,"featured_media":55620,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"newspack_popups_has_disabled_popups":false,"newspack_featured_image_position":"","newspack_post_subtitle":"By Rick Girling, California Public Banking Alliance","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"footnotes":""},"categories":[4],"tags":[23699],"coauthors":[18445],"class_list":["post-55617","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-voices","tag-bank-bailouts","entry"],"yoast_head":"\n