Home > #OWS, finance, FogOfWar > #OWS Alternative Banking update

#OWS Alternative Banking update

October 31, 2011

I’m excited about the meeting from yesterday and I’m trying to help coordinate next steps. As before, the caliber of the people and the conversation was inspiring – people from all over the place, with so many different background and perspectives. Really exciting! At the same time, we were left with a bunch of open questions and issues; we could really use your help!

The group was quite large, on the order of 55 or 60 people, and after some deliberation we split into two groups: Carne’s group went to the other side of the room to discuss a true alternative banking system, and quite a few of us stayed on the first side of the room to discuss problems with our current system and incremental (but not minor) changes to improve it.

We discussed, (not in this order) how the financial system can be divided into four parts, according to FogOfWar:

  1. Traditional Banking: taking deposits, checking accounts, CDs, making loans/mortgages, credit cards, debit cards, banks, Thrifts, Credit Unions, Payday Lenders
  2. Investment Funds: collecting money from investors and making investment in the capital markets: 401(k), 403(b), IRAs, pension funds, mutual funds, index funds, hedge funds (also money market funds with a big asterisk)
  3. Investment Banking: traditionally two categories: I-banking (giving advice to companies on raising money in the capital markets, M&A, etc), and broker/dealer activities (making trades on behalf of clients and market making) including derivatives
  4. Insurance: pooling risks amongst large statistical pools to spread large losses into smaller, manageable premiums. Home insurance, life insurance, car insurance, etc.

We also talked about the power grid, how the capital markets and the players in the capital markets control the small businesses which leads to what we see today, with people feeling disempowered from their own money and their own business. We talked about the shadow banking system, politics and the power of lobbyists, and about how we might be able to effect change on the state level by trying to influence where pensions are being invested. We also heard from a fantastic woman who helped form the Dodd-Frank bill and is an expert on the FDIC and various other regulators and understands where their vested interests lie (this line of thought makes me want to write a post on an idea my friend has of paying SEC lawyers on commission, in reaction to the Citigroup – SEC debacle).

[We will write the minutes of the meeting soon, hopefully; the above is just my recollection. Please comment if I've missed something.]

It was all very stimulating, and made me want to draw a bunch of visuals to help with the (very large) educational background required to really tackle these problems. Visuals like this or this would also help me prepare for my upcoming Open Forum this Friday.

At the end, Carne invited us to form a separate group from Alternative Banking, which makes sense as we are on the one hand quite large for his office and on the other hand interested in improving the current system more than a completely alternative one. That leaves us with a bunch of things to do though:

  1. Formally create a new working group through #OWS
  2. Choose a name
  3. Choose a representative to go to the #OWS meetings and explain our activities
  4. Find a place to meet
  5. Find a way to communicate
There may be more! Please comment if you have suggestions for solving these problems, or if you want to join the group; I will definitely be creating an email list at the very least so I can announce the next meeting once we figure this stuff out.
Categories: #OWS, finance, FogOfWar
  1. Aaron
    October 31, 2011 at 2:20 pm

    Will your open forum be viewable on youtube?

  2. Bertie
    October 31, 2011 at 6:37 pm

    Fantastic staff, maybe there is hope for this world yet!
    I knew I was onto something good when I stumbled onto your blog!

    Question: OWS seems a diffuse and disorganised group, do you think they have the ability to properly latch onto your work in any coordinated way?

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