CSR Press Release

In these days of trillion-dollar bailouts of major financial institutions, the terms "sustainable" and "banking" may seem more contradictory than complementary. Which raises the question: is the current unsustainability in banking a symptom -- albeit a widespread one -- of fraud and manipulation? Or, is there a root problem with the modern system of banking itself?

Bill Black, who busted the "Keating Five" in the 1980s as director of the Federal Savings and Loan Insurance Corporation and now teaches at the University of Missouri, does a great job identifying the fraud underpinning the crisis. In the long lead-up to the meltdown, Black told Bill Moyers, there was rampant fraud, from the banks issuing so-called "liars' loans" to the rating agencies rubber-stamping them "Triple A" to the investment banks pooling them into derivatives.

Now, Black told Barron's, the bailout is built on fraud: "We have failed bankers giving advice to failed regulators on how to deal with failed assets...If they are going to get any truthful investigation, the Democrats picked the wrong financial team. Tim Geithner, the current Secretary of the Treasury, and Larry Summers, chairman of the National Economic Council, were important architects of the problems," Black states.

Independent economist Chris Martenson agrees, and adds that Herb Allison, CEO of Fannie Mae -- which was at the core of the subprime fiasco -- was just named to run the Troubled Asset Relief Program, or TARP. Martenson quotes former International Monetary Fund Chief Economist (and current MIT professor) Simon Johnson: "[the] recovery will fail unless we break the financial oligarchy that is blocking essential reform."

In his Crash Course, however, Martenson digs deeper, and points to a series of fatal flaws in the banking system: that local banks loan new money into existence (linking it to debt); that the Fed creates money out of thin air (then links it to Treasury bonds, another form of debt); and finally, since all this money is saddled to debt, that modern banking requires perpetual expansion just to stay afloat. Martenson then asks rhetorically, "What happens when a human-contrived money system that must expand, by its very design, runs headlong into the physical limits of a spherical planet?" In other words, the current financial breakdown is not symptomatic, but rather systemic.

We will continue to rely on banks, so we return to the question, can banking be sustainable? Yes, says Athens-based Piraeus Bank. Last month, it hosted a "Sustainable Banking and Green Business" workshop for about 50 managers and executives from within the bank. Luminaries from the sustainable investing world spoke, including Stephen Hine of the Ethical Investing Research Service (EIRIS) and Tessa Tennant of ICE Organization and founding chair of the Association for Sustainable & Responsible Investing in Asia. Piraeus is running a three-year project called GREENbanking4Life, which seeks to improve the bank’s environmental performance, and make its operations more sustainable.

Community Development Financial Institutions (CDFIs), which cater to the low-income populations, represent another sustainable banking model that "can show the way back to stability," according to a January 2009 American Banker commentary by University of Virginia Professor Greg Fairchild. Opportunity Finance Network, the CDFI industry organization, announced seven of its members received CDFI Assessment and Ratings Service (CARS) ratings in the first quarter of 2009, bringing the total to 46. CARS ensures the kind of transparency and accountability exemplifying the opposite of the system-wide opacity and unaccountability that fueled the meltdown – and continues with the bailout. If banking is to be sustainable, this is the kind of practice required.


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Multimedia Picks for 4/14/09

Why AIG Gave Your Money To Other Banks

The financial crisis has been the most prominent news topic for months. If you're not an economist by trade, you may have found it tricky to familiarize yourself with the real ins and outs of this disaster. If so, please check out this video, in which Paddy Hirsch gives a brief presentation on why AIG has incited such widespread vitriol in terms that we all can understand.

Brian Bordainick Talk @ The Feast

Brian Bordainick is an infectiously energetic teacher whose first Teach For America gig landed him in New Orleans shortly after the city was all but obliterated by Hurricane Katrina. In this video he tells the story of how he and his students created a spirited athletics program out of a complete lack of funding with a heap of rubble for a playing field.

Social Entrepeneurs: Pioneering Social Change

The Skoll Foundation made this short film recognizing Social Entrepreneurs. For those of you unfamiliar with the term, it refers to people who apply their powers for innovation to improving the quality of life for people around the world. This story begins with Mohammad Yunus, a Nobel laureate whose invention of Micro-Finance allowed severely impoverished people in India to become small business owners. His loan system has since been emulated across the globe. This video offers a glimpse into the work of several other people whose innovative resourcefulness has made the world a better place to live.

Go Paperless!

Though the airwaves are a'buzz with plans for a green future, and the digital culture broadens its audience every day, one of the biggest obstacles in adapting to an eco-friendly way of living may be too obvious to easily see at first. How are we going to stop using paper? Go Paperless has answers. You can get a taste of them here.

Canadian Multimedia Picks

Go Paperless!

Though the airwaves are a'buzz with plans for a green future, and the digital culture broadens its audience every day, one of the biggest obstacles in adapting to an eco-friendly way of living may be too obvious to easily see at first. How are we going to stop using paper? Go Paperless has answers. You can get a taste of them here.

Severn Suzuki Speech at Earth Summit

Cullis-Suzuki was born and raised in Vancouver, Canada. While attending Lord Tennyson Elementary School in French Immersion, at the age of nine, she founded the Environmental Children's Organization (ECO), a group of children dedicated to learning and teaching other youngsters about environmental issues. Here she delivers an impassioned speech about detailing the urgency with which we must devote ourselves to protecting our global environment.

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