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Thomas Stones

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Instead of providing our funds to banks we should invest in local businesses, and our communities directly.

Banks and globalisation have led to a loss of local focus and restrict the ability of individuals and communities to enhance their own lives with the resources that they have available. Whilst banks pool our funds, they are compelled to operate on a purely competetive basis, investing globally. At the same time, private placement laws and legislation mean that banks are the only sources small, local and community businesses can turn to for financial support.

As a result, individuals lose potential profits they could be making by investing on their own behalf, rarely see the benefit of their own resources in the world around them and face risks that are, due to their global nature, completely outwith the scope of their daily lives and control. Instead, banks have become some of the most powerful institutions in the world by opening communities to global risks using resources which are not their own and which they are rarely held accountable for the use of.

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  • Dec 3 2011: I agree that banks do expose local communities to global risks, I do not think that it is a bad thing though it undoubtedly does have some negative consequences. First of all the biggest benefit to a local community being exposed to global forces is that global forces are also exposed to local communities. If all communities kept a vast majority of their money invested in their own and neighboring communities than anything that had a major negative impact on that area would devastate the communities, e.g. a flood or drought in a community that is centered around agriculture. Also ideally, it allows for people in the banks who supposedly better understand how to evaluate loan risks to make safer loans than would otherwise be made by individuals.

    However, with these benefits there is some loss. One is that banks are not 100% accurate or fair when they redistribute loans. I am sure that there have been many an idea which would have dramatically changed things for the better, or just been successful in a small town which have been shot down by big banks (though it should be noted their is nothing to ensure they would have been funded even without banks). But also because banks are not members of a certain community and they simply look to get more money and make more people their customers, they will give preference to some areas/companies which do not deserve the funds, or the level of funding provided, simply based on merit. This likely leaves some communities much worse off than they would be otherwise. However, all-in-all I believe it is a net gain for society.