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Re: “Oakland to Host Forum on Public Bank Plan

Once you have a plan for construction, you should figure out what core banking software you should use to run transaction accounts, loans, payments, etc. for the computers to hook themselves up to the financial infrastructure.
I would ask the BND what core banking service system they use and purchase from the same company.

Make sure you have the necessary banking equipment like this stuff:

Posted by JJ174 on 09/22/2017 at 4:36 PM

Re: “Oakland to Host Forum on Public Bank Plan

Theoretically, a bank doesn't need depositors or deposits to create credit. The BND doesn't have depositors but it takes deposits from taxes to create credit.
A city bank could work like the BND and have few if any depositors or even deposits from taxes and work by creating credit to fund city development.
If the city bank will create credit but have no restriction on credit creation based on deposits, it must work with both the county and the state to determine a loan growth quota, meaning a yearly allotted amount that can be legally created to fund city development that year.
If there are no restrictions on credit creation, the bank could theoretically create a limitless amount of money when resources are limited and needed elsewhere. If every city had its own bank creating infinite money we would drive up prices for resources in limited supply, so those resources need to be allocated properly through a loan growth quota.

Posted by JJ174 on 09/22/2017 at 2:05 PM

Re: “Oakland to Host Forum on Public Bank Plan

One more thing that needs to be mentioned is governance of the bank. If it is a city public bank how much influence or control do the elected representatives of the city have over the management of the bank? If you are the CEO of the city public bank what is your relationship with the mayor of the city and its council? Can the mayor fire you and appoint someone else to run the bank if he/she feels that your decisions do not represent the will of the elected majority? Should their be more collective decision making between the mayor, the city council, and the person appointed as CEO of the bank?

Posted by JJ174 on 09/22/2017 at 12:32 PM

Re: “Oakland to Host Forum on Public Bank Plan

I think a public bank for the city needs to have city development goals like financing adequate housing needs, small businesses, and clean energy needs.

Then it needs key borrowers who are willing and can be trusted to use funds to hire the necessary people to construct the city. Those borrowers can either be representing individual private for profit interests or the public sector. Like someone can borrow money to buy private property for solar panels to make a profit on it or someone representing the public can buy land under the public sector and build panels that generate profit to fund public services of the city.

Posted by JJ174 on 09/22/2017 at 12:06 PM

Re: “Oakland to Host Forum on Public Bank Plan

What needs to be done is not a study but a plan.
1) Create or find a construction plan to build the bank and determine the estimated costs of construction including the cost of purchasing financial equipment infrastructure.
2) Next, determine the estimated costs of maintaining the operation of the bank (salaries, utilities, etc.)
3) Next, determine where the bank will be constructed and how much purchasing the land will cost.
4) Next, determine how the bank will stay in business to not only make up for the costs and stay operational but generate a profit for the community. Is there a need for the services? Is their some benefit to switching their deposits to the local public bank rather than to continue what they were doing before at their private bank (Wall st or credit union)? If there is no need for lending services or if its too new and risky it's going to be a hard sell to attract depositors. The public bank needs some clear goal for what it intends to finance and how it intends to improve the community and it needs to market that to potential depositors. Are the profits that are generated going to fund the public services of the city in place of state taxes?
5) Next, determine what the current regulations are that would apply to the operation of the bank.
6) Next, the bank needs to have a plan for how it intends to avoid a high percentage of non-performing loans on its books because if it does not filter out credit worthy from non-credit worthy borrowers and does not compel performance (require collateral for capitalization) on loans by borrowers it will have a high percentage of defaults.

Will the bank be run like a state bank and have most of its deposits be from tax dollars or will it be based on depositors money? I am not aware that the city levies its own tax to place those dollars in its own bank. I believe tax dollars are levied by the federal and state governments.

Posted by JJ174 on 09/22/2017 at 11:06 AM

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