Authors call for a greener, smaller banking sector

| 19th October 2010
Cash

The UK needs a smaller, community-based and accountable banking system

In an exclusive Ecologist interview, David Boyle and Andrew Simms of the New Economics Foundation advocate a more sustainable banking sector for Britain
 

The large-scale corporate banking sector needs to be broken up into smaller, community-based banks, argue David Boyle and Andrew Simms of the New Economics Foundation (NEF) in an interview with the Ecologist this week.
 
‘Big makes it harder and harder to be responsive to local circumstances. We have not yet found a way to make large institutions work well at a local level. When you have too many large organisations you get imbalance, frailty and vulnerability,’ said Simms.

‘Diversity of scale, size and range, and type of organisation - as in nature - is an insurance policy against disaster. Optimal diversity delivers greater resilience.’

Boyle told the Ecologist that ever-expanding companies are increasingly ‘dominating larger shares of the market’, and argues that Britain needs to eradicate big banks by splitting them into ‘smaller scales’ and creating a ‘new small banking sector’.

According to Simms, the larger the banks are the ‘harder they fall’, and in order to create a green economy we need to acknowledge that the economy cannot ‘outgrow’ the biosphere.

‘To get us there means a whole range of other things: the prices we pay for things have to include the social and environmental cost; we have to have indicators telling us whether we are moving in the right direction or not.’

The government has already been accused of using taxpayer’s bailout money for environmentally damaging investments. Earlier this year, Barclays and RBS were criticised for financing projects that led to environmental damage. RBS had been found to have invested in tar sands oil extraction in Canada, an opencast coal mine in Bangladesh and oil exploration in central Africa.

Boyle argues that despite the availability of information there is ‘very little knowledge’ on what the banking sector does with the taxpayer’s money.

Read the interview in full

  READ MORE...
INTERVIEW
David Boyle: Let's create a new, small banking sector to fuel green economy
A new book by David Boyle and Andrew Simms of the New Economics Foundation charts the rise and fall of major British brands. Matilda Lee talks to them about banking reform, brands and greening capitalism
NEWS
RBS labelled ‘dirtiest bank in Britain’
Pressure groups take Treasury to court for second time in a year over failure to assess the environmental and human rights impact of RBS
HOW TO MAKE A DIFFERENCE
How credit unions can succeed where banks fail
If you're looking for small, short-term loans for a green project, it's worth borrowing from a credit union instead of a bank
COMMENT
We should all know how RBS spends our money
Officials can sternly lecture the City on its excesses as much as they like: when it comes to actually regulating it, politicians just don't care. And don't want us to know...
NEWS
Call for publicly-owned green bank in UK
National green bank would help finance major renewable projects like offshore wind that might not otherwise get off the ground

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