Institutions release report outlining approach for a LA city-owned bank
The Jain Family Institute and the Berggruen Institute Thursday announced a joint report series to assist renewed efforts by the Los Angeles City Council to establish a public bank.
The series of reports, with an introductory working paper released Thursday, will outline approaches the city would take to establish and administer a city-owned financial institution. The reports would also analyze the impact of new lending programs on affordable housing, housing business and green energy.
"Los Angeles has many served financial needs," said Yakov Feygin co- lead of the project and associate director of the future of capitalism program for the Berggruen Institute. "Our city can start thinking about using its finances more creatively and proactively to solve the city's problems by investing in itself.
"A public financial institution like a public bank or municipal finance corporation can be a critical piece of the puzzle for solving the city's pressing problems."
The introductory working paper released provided a summary analysis of lending programs that could create more affordable housing through lower- cost debt for construction, an acquisition fund for affordable housing preservation and expand low to moderate-income homebuyer assistance; empower worker ownership of small business; and accelerate the green energy transition through loans for retrofits and utility-scale investment.
Forthcoming reports will explore these lending programs and the bank's overall administration in the following sequence: affordable housing, financial justice (small business and related investment), green energy and a democratic governance.
The series will culminate with the release of balance sheet simulator to allow for public participation and garner feedback, and to test cost and profit assumptions across the bank's hypothetical balance sheet.
In October 2021, the Los Angeles City Council approved a vote to request for proposals process for a viability study and business plan. This series of reports are slated to be published through May -- and give stakeholders and the city a template for programs and administrative structure of a city-owned bank.
According to the institutions, the reports include expert interviews, aggregate data on citywide trends, and the expertise of researcher at both JFI and the Berggruen Institute. The series adds to a research base on public banks in the U.S. and internationally; incorporates key lesson from successful public banks such as the Bank of North Dakota; and builds on a report from the Democracy Collaborative and Public Bank of LA advocates from 2022, which can be viewed at https://bit.ly/41Ol7ZB.
"These reports help to anchor these exciting public bank discussion with practical options for a portfolio that builds stability, wealth and climate readiness across the city -- and does so in collaboration with existing players," said Halah Ahmad, co-lead of the project and vice president for policy at JFI.
The Jain Family Institute is a nonpartisan applied research organization in social sciences that works to bring research and policy from conception in theory to implementation. The Berggruen Institute's mission is to develop foundational ideas and shape political, economic and social institutions for the 21st century.
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