Find the latest episode of "The Uncertain Hour" here. Listen

New push for public banks

John Dimsdale Apr 27, 2012

David Brancaccio: In Philadelphia today, there’s a conference to urge state and local governments to start “public banks.” A public bank could invest idle taxpayer dollars like public employee pension money or government rainy day funds into the local economy. Mortgages, student loans, neighborhood parks, maybe infrastructure — but, just what is a public bank?

Marketplace’s John Dimsdale reports.


John Dimsdale: As someone who didn’t know anything about public banks, I told the Public Banking Institute’s Michael Krauss that he has a semantic problem. A public bank sounds like a government takeover.  He agreed. 

Michael Krauss: If you call it public banking, automatically you get red flags. In Washington state, they call it the Washington Investment Trust. They don’t use the word “state” and they don’t use the word “bank” in their legislation.

Whatever you call it, Krauss says local governments are beginning to realize they can put pools of taxpayer money to work in the community instead of sending it to Wall Street.

Krauss: In many states, the money goes off to Bank of America or Morgan Stanley, and they never see it again. It gets loaned into other businesses, other countries, other enterprises. It doesn’t come back to that state.

North Dakota has run a successful state public bank that’s been backing local infrastructure projects for 90 years. Chicago just created the first city infrastructure trust. And 17 state legislatures are considering bills to either start or study their own public banks.

In Washington, I’m John Dimsdale for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.