Public Banking Institute

June 14th, 2013

Public banking is banking operated in the public interest, through institutions owned by the people through their representative governments. Public banks can exist at all levels, from local to state to national or even international. Any governmental body which can meet local banking requirements may, theoretically, create such a financial institution.

Public banking is distinguished from private banking in that its mandate
begins with the public's interest. Privately-owned banks, by contrast,
have shareholders who generally seek short-term profits as their highest
priority. Public banks are able to reduce taxes within their
jurisdictions, because their profits are returned to the general fund of
the public entity. The costs of public projects undertaken by
governmental bodies are also greatly reduced, because public banks do
not need to charge interest to themselves.  Eliminating interest has been shown to reduce the cost of such projects, on average, by 50%.

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