What are publicly-owned banks? Why do we need them? Public banks
are financial institutions owned by government entities, such as
cities, states, and nations. The initial capital for a public
bank often comes from a government appropriation or the proceeds
of a loan arranged for the purpose of making the initial
investment, but there are also other ways this money could be
acquired. They include (a) reinvesting money from idle state and
local funds – funds that must currently be maintained as “rainy
day” funds because state and local governments do not have the
sorts of instant credit lines available to banks; and (b)
setting the bank up as a DBA of the state, making all of the
assets of the state assets of the bank. Both public and private
banks do two fundamental things: (1) Keep account of our money,
and (2) issue credit (i.e., loans). Money and credit can create,
slow, or accelerate economic activity. A bank matches borrowers
and depositors, and profits from the spread difference between
the interest paid