As I look back into Liverpool’s not too distant past I can see that at one time we had headquartered in Liverpool a national bank – Martins, the Liverpool Building Society, The Merseyside Building Society and at least five separate Trustees Savings Banks.
Now not one big financial organisation is headquartered in Liverpool. If you are lucky, big decisions about investment in our city are made by politicians in London. If you are unlucky they are made by financiers in Shanghai!
But it doesn’t have to be that way. There are many things that we could actually do both in the field of banking and retailing to pull decision making back to our localities and reduce our dependence on national and international decision making.
I am sure that some people will think that I am at least slightly crackpot when I suggest that Liverpool could have its own bank. But we could and in my opinion we should. Liverpool alone as a council has £1.3bn washing through its accounts each year. We have at any one time in our own right or in our management £100,000,000 of medium and short-term investment. Just think what those figures would look like if we added in the turnover and short and medium term assets of the other five Merseyside councils. At Merseyside level we operate a Merseyside Pension Fund with assets of over £1bn and a Special Investment Fund for commerce and industry.
These are big figures and in the most efficient economy in Europe and in the most efficient economy in the world, the US, much of this money would not be handled by national banks but by regional and local banks responsible for their actions to regional and local investors.
The people I have asked to help Liverpool in this matter are not leather-sandaled beardies but hard-headed financiers. They are advising four other areas in a similar way and provided much of the technical and logistic support to the newly established Metro Bank. They feel that a Liverpool Bank, open in the first instance for investment and not retail activity, could be up and running in just nine months. You can find out more a Tusmor.org.
And there’s more!
What about loans to credit unions to help them fight the depravity of pay day lenders? We can borrow money cheaply so why not make subordinated loans to some of the excellent credit unions in our communities who can lend money carefully and cost-effectively but don’t have enough money to lend?
What about taking on the algorithm financiers? So many investment decisions are not made by people now but by computers. Spotting minute differences in a share price or a currency value they distort markets by continually making transactions for small but cumulative gains. We need hedging and forward purchase of a currency and shares for many reasons but sometimes the speculative investment levels can be no less than 1,000 times the levels needed for legitimate and sustainable long-term trading. So why don’t we all support the calls for a Tobin or ‘Robin Hood’ tax on financial transaction?
We can all personally do something about the way bankers behave. After attending meetings with the new ‘Move Your Money’ organisation I challenged my bank about my charges. As a result of a 20 minute conversation I have decided to stay at my existing bank but instead of paying £20+ per month I am now paying nothing. When I looked at the services I was paying for through my premium account I discovered that most of the services were bogus and the best ones I was paying for in other ways. So that’s £250 I have saved and so could many people reading his blog.
These are just some of the ways that I think we could all make a difference and wrest power back from the boys in the red braces. What sort of ideas do you have? Are you involved in local online banking or peer to peer initiatives which seem to be the next big idea?
The biggest idea of all, of course, is to understand that dominance by the international and national banks is not inevitable. Get challenging, get discussing, get creating new partnerships and institutions. Let’s return to the past. Local banks are not a new idea but an old reality. Liverpool became great when we managed our own affairs. We will be great again when we reclaim that management.
Read New Start’s special issue on local finance.