Uni of Banking

Geithner Inauguration Day +1

Senators, our financial system failed to meet its most basic obligations. The system was too fragile and unstable, and because of this, the system was unfair and unjust. Individuals, families, and businesses that were careful and responsible were damaged by the actions of those who were not. So we need to move quickly to build a stronger, more resilient system with much greater protections for consumers and for investors, with much stronger tools to prevent and respond to future crises.

please help search the new banking models of yes we can rsvp info@worldcitizen.tv
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Here is an extract from the UK’s senior economist Norman Macrae’s end of 2008 newsletter, now in its 60^th year since his career as a journalist began in The Economist.

If banks in rich democracies had been truly competitive institutions, at least one of them somewhere would have seized the main opportunity created by the computer. This main opportunity was to make all deposit-banking vastly cheaper than ever before. By this cheapening it should make such banking hugely more profitable. Then further competition would search for the cheapest ways to guide all the world’s saving into the most profitable (or otherwise most desirable) forms of capital investment, thus enriching all mankind. Instead, during 2008 the total losses of banks in rich democracies – in North America, West Europe and Japan – soared into trillions of dollars. Fearful for their solvency, these banks virtually stopped lending. The issuance of corporate bonds, commercial paper, and many other financial products largely ceased. Hedge and insurance firms also crashed. Mankind is thus threatened in the 2010s with its longest great depression since the hungry 1930s. Why? The strange answer seems to be that other happy consequences of modern technology promised to make this cheapening even faster. Call centres in Bangalore vastly undercut the middle class salaries of Midland bank clerks who until the 1950s expensively answered clients’ questions in their branches in the City of London. Cheap mobile phones kept village ladies in once miserable Bangladesh as fully in touch with market prices as is the chief research officer of the First National Bank of Somewhere in California. His weekly salary is still 1000 times greater than the previous annual earnings of that village lady. The cost-effective way of running the old Midland or First National then seemed to be to cut its total salary cost by something like 99%. This did not please Western welfare governments, or the decent chief executives of the old Midland or First National bank.

Awaiting the sensation of a short sharp shock

From a cheap and chippy chopper on a big black block – WS Gilbert in The Mikado - why it is uncomfortable to work in an industry which needs 99% redundancies.

Western welfare governments have long preferred to run their banks in high cost cartels, and even invented reasons why this seems to be moral. Their deposit-banks have usually kept in cash only 10% of the total amount deposited with them. If 11% of depositors suddenly feared that their banks might go bust, this could accelerate a run that would send them bust indeed. Governments therefore thought that depositors would be less fearful if they were assured that the banks were officially and tightly regulated. Actually, this mainly meant that the banks had to hire ever more expensive lawyers so as to escape any crippling consequences from this regulation. The attached quote shows that Samuel Pepys understood this fact of life in his Diaries of July 21, 1662.

I see it is impossible for the King to have things done so cheaply as do other men

– Samuel Pepys on discovering an important commercial fact of life in his Diary, 21 July, 1662

The decent bosses of the deposit banks felt that the best way of avoiding sacking nine tenths of their staffs was by competing with a very different sort of financing called merchant banking whose earnings and bonuses were far more generous than those given to their own staff. These merchant banks were of peculiarly differing pedigree. In London, it was assumed that they could best be run by families like Barings who had done the job for over 200 years. In the 1990s, Barings went totally bust because one of its hired traders bet much of its money on a hunch that a bad earthquake in Japan meant that the shares of Japanese banks and insurance companies would become more profitable. In Zurich, merchant banks felt it most moral to keep the accounts of their depositors totally secret, especially if these accounts were being used to defraud their own countries’ tax authorities. In 2008 those secretive banks were then defrauded. In Wall Street, Goldman Sachs and Lehman Bros bid up their annual bonuses to millions of dollars for each partner. In 2008 even Goldman Sachs made a loss and Lehman Bros went bust. A former chairman of the Federal Reserve argues that “fearful investors clearly require a far larger capital cushion to lend unsecured to any financial intermediary now”. He therefore thinks that taxpayers money should be ladled into them to make those investors less fearful. This seems far more likely to make depositors intermittently more terrified and cause any depression into the 2010s to linger on and on.

In the 1930s, the chief economic adviser to the government of Siam was called Prince Damrong. I try always to remember it

– quote from former director of International Monetary Fund.

One of the few big banks to make a profit in 2008 was the Grameen Bank (which means Village Bank) in that once basket-case country called Bangladesh. The sole staff in a branch serving several villages was once a woman student. It is now more usually someone who has learnt to use the computer in the right way.

How to create cost-cutting banks? Learning from Dr Yunus and those who have exponentially sustained community rising microcredit seems to be the best way forward worldwide women and USA Congressmen can get. http://www.results.org/website/article.asp?id=3709

.First, we've lost track of the toxic assets, the point made in my earlier post "It is about transparency" by Hernando De Soto, President, Institute for Liberty and Democracy, who said:

We don't know who's got the toxic paper. You know that there are buildings behind bad paper. We don't know which are the buildings that debts are not being paid on. We've lost track.

To which Jagdish Bhagwati, Professor of Economics, Columbia University added:

In each of these financial crises that we have had, the new instruments and changes have usually gone way beyond comprehension. And I think that's really at the heart of financial innovation.

Joseph Stiglitz, Nobel Prize-Winning Economist Columbia University, agreed:

I think the point that Jagdish made is exactly right, that much of the innovation that we've had in the financial sector in the last two decades has been of negative value. It has been creating complexity.

It's not a question of disclosure. You could disclose these documents, but nobody -- the buyer, the seller, the regulators can't understand them.

And it was done deliberately. It was done deliberately, so people couldn't understand what was going on.

DO NOWS - lets discuss some yes we MUSTs not just CANs - to unite micro-banking worlds and next generation learning by doing in the world's only sustainable brand architecture worth living

#1 here's a reworking of a living script (longer version attached) of you havent lived to understand what the global banking crisis is about if you haven't seen the 2 minute video number 2 on the 10000 yunus dvds

Student's STORY of Being Born in 1999 in New York

The older I have become as a market and media researcher, the more I value the good question ahead of the good sounding answer. The smartest question I heard in 2008, if not the whole millennium, was posed by a 9 year-old in January of that year. He asked his question with great passion to 1000 New Yorkers, and the entrepreneur whose book talk on human economics we were celebrating as it entered the bestsellers list. The imagination-liberating question was : which banks will last for a long time?

Now I must confess that back in January 2008, I didn’t begin to know all the reasons why the question was smart. But I heard its passionate curiosity, and even a stunned silence as 1000 New Yorkers wondered how the speaker would reply http://www.youtube.com/watch?v=FKXXsINFoHQ . My first action was self-interested -having 007 detested the 3rd grade curriuculum on money my daughter is required to learn parrot-fashion in the DC schooling system, I wanted to explore

A CURIOUS THING

It turned out that the educational project the child’s class had enjoyed went through these steps

Step 1 : Survey each other on what’s the most important kind of work your parents and people we trust in the community do

Results 1 : the top 2 types of jobs involved:

Health and safety in the most practical service senses of enabling everyone around us to be healthy and safe which includes such community builders as sheriffs who get rid of the bad guys from our streets, fireman who rescue people as well as those who work to provide clean water, food and energy, providers of shelter and hygiene over the heads of my family and all my friends’ families.

Education : what we become happy and confident about know how to search out useful facts from misleading ideas, how to make the future better than the past, how to maximise my passion and ways I spend my time and help my peers do likewise.

Step 2:

Can we search out anywhere in the world where banks help people to save and invest communally in the jobs you value as most important.

Results:

There is a country which spent the last quarter of a century designing how to do this with its community-sustaining banking system. Over 250,000 people are directly employed in serving customers and societies with this service in the lowest cost ways of continuously improving this purpose. Their work serves about 25 million families by helping the breadwinner create useful jobs for herself and others. Since 1997 open sourcing of their innovation system has been networked around the world

correspondence on happy banking

I used to call Muhammad Yunus the happiest banker in the world but right now I am sure he's delighted if Ingrid Munro takes on that title during Yes We Can Adminstration

some correspodence on her remarkable youngster- Kenya's Jamii Bora (Good families micro-world services)

Dear Peter O, 21 J09

Thanks for mailing Uni of Banking . Our hope is that Jamii Bora becomes an open best case for distribution channel of vital solutions, practices in the communty knowhow as well as mobile monitor of best communal use of resources. It already distributes about 15 things beyond banking including probably the world's most economic health system, housing projects, a microentrepreneurs business school, -its run by the poor and youth from the slums so they know what sorts of solutions matter most. Its inspired progress attracts some of the Microworld's best partners including the wholeplanetfoundation and Unitus

This hope depends on the JB collaboration plan to be everywhere rural and not just their nairobi start. They will be presenting that at the world bank next week. In little more than 5 years they have accelerated from nowhere to, in my opinion, the most interesting case of how micro can connect everything most urgently needed in the community up in the whole of africa if not the whole world. Moreover it is fortunate if kenya - a country of great interest to the new man in the whitehouse - can provide best case of making connections

I hear that this must be a far away dream from the daily realities your rural community currently struggles with but suggest its far nearer than all the 20th c global aid program. Its the best chance I can search for though of course I am interested in hearing other benchmarks. I am absolutely NOT knowledgeable about Africa. In the next 90 days America will need to start proving whether its returned to be in the dream-can-be-made-reality world or not. What Yunus forum calls Impossible becomes Possible if right people time place actions. If the white house was to announce a partnership between its superpower and jamii bora's superempowerment then that future capitalism could rock the world -or maybe it doesnt need to mass announce but just do it and web-log it. (Fortunately the whote house now looks like being one of the better websters in the universe)

chris macrae washington dc 301 881 1655 info@worldcitizen.tv http://yunus10000.com

uni of banking http://www.yunusuni.com/id61.html

Help us brief journalists on Micro-Up's other way roumd systems

Jerry phoned today to mention that peter burgess is now new york editor as well as jerry being us editor out of Dc

There also seemed to be a conversation on what are the 10 different really micro up models of microcredit

Thing is I can make some guesses that provide a first steer; I wish we could find a few more people who use this email like a roundrobin or microwiki to cross edit it but let me dump some views and mostofa who probably knows best of all may help edit the bangla view

0.0 what I 100% sold on is poverty is a problem at the community level - and its impossible for a desperate poor community to sustain out of poverty unless its most trusted leaders are banker teacher and healthworker (teacher includes agricultural knowledge replicator etc and ideally encourages action learning as young as practical- Gandhi united with Montesorri to develop rural schooling models in 1920s which remain a benchmark)

1.0 Bangladesh seemed to invent that fortunate combination in response to the year that a million died of starvation with fazle abed (BRAC) replicating heath and education, and yunus replicating banking. More recently they have criss-crossed each other's functions but yunus has never liked being funded by aid and has preferred to keep every new business separate - literally a bank of businesses. fazle has specialized in taking glob aid but turning it into bottom up services unlike any other organization I have ever heard of.

1.1 Any business started by grameen before 1996 mobile phones is likely to be very rural, manual; and its direct customers will still be mainly illiterate women. (hardcover Future Cap book gave a list of Grameen Business on page 78,79 )- this can be thought of as a pure list before the partnering with top of the worlf organisations started up Future Capitalism as the 4th big innovation of colaboration that bangladesh has given to the world since 1976 - I think we can say that Bangladesh is number 1 activator of achieving millennium goals and arguably the number 1 nation innovating above zero sume worldwide trade in a sustainable way. Actually if it can renew these dynamics in India and China this will be the most marvellous of events for humanity

1.2 Grameen's old pre-networked busiensses include all the agricultural businesses but not the energy businesses.

1.3 Grameen always insists that its banking product must work for the very poorest but equally now that some members are 30 years into investing in its system , it now makes loans to small and medium size rural businesses as well as one person ones. Moreover by charter Grameen Bank can only serve rural where Brac is also a city bank. When you look at what Grameen does there may be very little middle between very manual and very smart digitally or ecologically. Its energy, InfoTech and most of its future capitalism projects are likely to be at world class edge albeit minimalist in simple designs.

2.1 I do not think that anyone in Bangladesh is claiming that its rural banking gives an immediate franchise that works in eg semi-urban slums. Though I think its core values and process of hi-trust banking does. This makes Jamii Bora so exciting as it has all the values of Yunus but has been born post-mobile and its members are slum youth not rurally isolated women

2.2 I think it is possible to imagine another kind which eg Peter Ryan may be developing. After 10+ years experience I Malawi as a local operation, I think he is looking at how do we get internet funding a la kiva but with much more depth and whole communities to sponsor not random jobs at a time.

3.;0 All of the above models give somewhat different opportunities for micro uni youth clubs to make case studies, intern or help knowledge transfer

3.1 There are probably some legitimate other cases to think of - eg east Europe seems to me to be a case of trying to put investment back into places that had some infrastructure. Perhaps this is one region why I can understand the foreign commercial approach as opposed to the organic community owned as being worth having

3.2 There is also the issue of models in rich countries but with unbanked people - both Grameen America and the new microcredit bank in Paris sound interesting.

3.3 I hope this brain dump though a bit random starts to suggest why it may well be that if we can progress the 93 congress people's vision to get a deep 10 microcredits exchanging knowhow all round the world including their own replication projects and testing out new ones that may need their deep channels as partners then we will see as many as 10 different model of microcredit but all primarily with the same values and driven by social business models at the core

3.4 I am sure that curious-natured journalism has an important part in helping understanding be true to micro-up as well as being very timely if we are also trying to swap minimum consensus briefs all across microuniversity clubs

4.1 In Dr Yunus' mind (and many he inspires) established microcredits post-mobile now become the channel, the media representing the poorest and so can make a best partner in any vital Micro-up service area for community sustainability. When I asked how big a network could his blue book on social business connect vis a vis pure microcreditsummiting - he said 7 .I am not sure if that's to the power 7 or 7 times but credit*health*energy*education*media*change top-down profession*change gov to serve within community -combine to map Yes We can territories to cross-cross humanity's millennum goals networking through

I look forward to you all spotting any mistakes. Good if rachel can add in para on ASA which I expect is different again from what I have briefly logged

chris

uni of banking http://www.yunusuni.com/id61.html

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