Policy Spotlights

This column includes short pieces explaining policy proposals that highlight, revise, or contest current monetary design.  While we focus on contemporary proposals, historical episodes may be included occasionally.  Columns are written by editors or by student authors and will be updated monthly. …

Policy Spotlight
Italy’s mini-BOT Proposal

Author: Michael Svedman
The proposal by Italy’s Lega Norda (or League) political party to introduce a currency-like instrument called the mini-BOT that would circulate alongside the euro has generated significant commentary and criticism. These debates shed light on the public dimension of money by forcing us to consider the relationship between monetary authority and political sovereignty. With implications reaching far beyond the economic impact of such an instrument, the mini-BOT raises urgent questions about the stability of the European Union, the rise of populism on the Left and Right, and the coherence of the neoliberal political and economic consensus that underwrites the EU project.   

The proposal by Italy’s Lega Norda (or League) political party to introduce a currency-like instrument called the mini-BOT that would circulate alongside the euro has generated significant commentary and criticism. These debates shed light on the public dimension of money by forcing us to consider the relationship between monetary authority and political sovereignty. With implications reaching far beyond the economic impact of such an instrument, the mini-BOT raises urgent questions about the stability of the European Union, the rise of populism on the Left and Right, and the coherence of the neoliberal political and economic consensus that underwrites the EU project.   

Background

While several prominent figures associated with the League, including former Deputy Prime Minister Matteo Salvini and former president of the Senate Finance Committee Alberto Bagnai, have expressed support for the idea of using small denomination government bonds to pay public arears, there is no …

Policy Spotlight
Public Banking

Author: Bryna Godar
The public banking movement has gained significant momentum in recent years, with groups across the country looking into the viability of government-owned banks for their communities. From a “pot bank” in Los Angeles to a “public infrastructure bank” in Massachusetts, proponents of public banking view it as a way to address community needs and better leverage taxpayer funds to benefit the public.   

The idea of public banking in the U.S. isn’t a new one — the state-owned Bank of North Dakota has been operating for 100 years, gaining widespread bipartisan support despite initial political opposition. And early banks in the U.S. were sometimes owned partially or entirely by states, like in Vermont. But the idea has gained new momentum in the years since the 2008 financial crisis. According to the Public Banking Institute, 15 states and 11 municipalities are taking official steps to explore public banking, and more than 50 organizations are promoting public banks.

The public banking movement is not without its critics, however. In 2011, the Federal Reserve Bank of Boston produced a feasibility report advising against the idea, and members of the banking industry have mounted opposition to the idea in New Mexico and elsewhere. Some of the greatest challenges public banks face include high up-front costs, risks of corruption, and the overall difficulty of integrating a new institution into the banking industry.

This article will provide an overview of public banking, including a discussion of the Bank of North Dakota and …