Professor bashes the big banks

Professor Richard Werner, writing in the Sunday Herald of April 15th, held that big banks are damaging to the economy and said, ‘We need to move to a banking sector that consists of hundreds of autonomous, locally headquartered banks.’

The logic is irrefutable. Local banks can’t lend large sums to speculators and are more interested in supporting small investors. Werner points out that Germany, the admired financial wizard of Europe, has so many local banks and credit unions that they amount to 70% of the nation’s banking. Britain, in stark contrast, has just five banks, which between them mop up 90% of banking. We should, he says, ‘be offering incentives for people to create local co-operative banks.’ Local government, too, could be moving into this, as recent legislation gives councils the power to set up banks.

Professor Werner is director of the Centre for Banking, Finance and Sustainable Development at the University of Southampton, and featured as a keynote speaker at the Just Banking Conference in Edinburgh on April 19-20.