The Ecology of Finance

Only radical reform of the UK banking and financial sector can deliver institutions capable of investment and lending that is economically and socially productive. Rather than seeking a technical fix for our sick financial sector Government should be having a philosophical rethink. A return to business-as-usual would prevent the Government’s own stated ambitions of a more competitive and diverse sector from being realised.

The Ecology of Finance calls for recasting the entire banking and financial sector according to what the proper function of finance should be. No longer wedded to short-term and profit-driven models of lending and to risky, volatile speculative investment, the banking sector would, instead, form a highly diverse ‘ecology’ of institutions that range in structure, market sector and scale; adapted to the complexity and shared long-term goals of the economy.

To realise the vision of a stable and productive financial system, which we have termed the ecology of finance, then preventative reforms to rein in the excesses of the financial system must be combined with positive measures to harness the potential of both mainstream and alternative financial institutions.

Recommendations include calls for green investment banking, post office banking, the growth of credit unions, co-operatives and mutuals, community land trusts and social investment banking. The report also calls for new legislation to bring transparency to the financial sector and to link large commercial banking with community finance via a UK version of the Community Re-investment Act.