CP solves

Public banks are increasingly regarded by the international development community not as corrosive but as catalytic for investing in low-carbon infrastructure. The overarching ‘new’ neoliberal narrative is that only by using public resources to mobilize private finance can we begin to raise the financial resources needed to tackle climate change. Yet figures produced by the World Bank and the Organisation for Economic Co-operation and Development have misrepresented the value of public finance by suggesting that public banks have only US$2–5 trillion in assets. This chapter shows that there are in fact 693 public banks worldwide that own assets worth as much as US$37.72 trillion. When you include multilaterals, pension and sovereign funds, and central banks, public finances amount to almost US$74 trillion, equivalent to 93 per cent of global gross domestic product. Public banks have sufficient resources to lead the way in raising the required US$90 trillion in total and $6 trillion annually in climate infrastructure investments needed – without having to turn to private financiers. Public banks can operate indefinitely without a profit-maximization imperative if given a public mandate to do so. They are better equipped than their private counterparts to finance priority economic sectors and geographic regions; to fill the gaps left open by the private sector; to promote economic stability by lending at times of economic instability; and to improve financial standards by insisting on social, environmental or human rights safeguards. But the potential of public banking ultimately depends on the social struggle to reclaim public banks in the public interest. This will define their future viability.