Has the Time Come for City-Run Public Banks?
Politically, I certainly see the appeal.<p>From finance&#x2F;economics point of view...I dunno. If I was cynical, I might say it seems like we&#x27;re being asked why city funds should be parked in accounts making safe, legal, loans which are likely to paid back, when we could just let the amazing SF city government use the money as a slush fund to make loans to their pet causes and politically connected businesses.<p>Phrased like that, it doesn&#x27;t sound amazing! Or as the article puts it:<p>&gt; There’s been some suggestion that these types of banks would lend to entities that might not otherwise be creditworthy,” Beth Mills, a spokesperson for the California Banking Association, told CityLab.<p>Yeah, and most of those suggestions are coming straight from the mouths of the proposals supporters. If you&#x27;re struggling to find loans for your ambitious infrastructure project, is it... maybe... <i>possibly</i>... that the proposal doesn&#x27;t make a ton of financial sense? What&#x27;s your city&#x27;s (or state&#x27;s) track record on these projects? Would a neutral analyst fear that you&#x27;re fudging the revenue estimates and lowballing the costs?  What <i>is</i> the risk of overruns? Bluntly, how credit worthy <i>is</i> the project?<p>&gt; “Every politician is talking about affordable housing, but it would be so much more powerful if they had a bank that was financing affordable housing,” said Jacob.<p>No doubt. But <i>will building affordable housing be profitable</i>?  And if not, will the project be able to repay the loans?  (Or if so, why are banks not willing to finance it?)<p>There&#x27;s a real &quot;dog that didn&#x27;t bark&quot; feeling to this article, at least for me.