The Ecology of Finance. An alternative white paper on banking and financial sector reform. November 2009
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In the UK, a host of alternative and innovative social or ecologically
focused financial forms and approaches exists. In fact, the UK has been a
hub of financial innovation for centuries. It is only in the past few decades,
in which the assumption that the market always knows best has
dominated, that the UK financial sector has grown to be so uniform. This
report considers how the approaches of little-known but highly effective
alternatives can point the way to reform of the entire sector.
The alternatives that already exist demonstrate that a more diverse and
socially focused set of financial institutions can survive even in the
extreme conditions that existed prior to the financial crisis. With enabling
regulation and policies, the alternatives that we highlight could represent
the ecology approach to finance.
This alternative White Paper distils lessons for the reform of the financial
system from organisations that are designed to capture social and
environmental value, not just profit. In doing so it showcases examples of
enabling legislation and a wide range of alternative financial institutions
that could help the UK to develop the kind of diversity and dynamism
needed to create a healthy ecology of finance. These include:
Credit unions, community development finance institutions and
community land trusts.
Green investment banks such as the Nordic Investment Bank.
The Community Reinvestment Act in the United States.
The Mondragon Cooperatives and Caja Laboral Bank in the
Basque region of Spain.
A Social Investment Wholesale Bank and innovations including
social impact bonds.