Recovery towards what?Finance, justice, suistanaibility

Session on

Alternative Banking models

Ugo Biggeri Fondazione Responsabilità Etica

Founded by Banca Etica

biggeri.fondazione@bancaetica.org

SUMMARY

5 slides on Banca Etica

Alternatives Models

figures

Conclusion

Banca Etica’ s history (Italy)

80’s: first experiences of ethical finance in Italy with financial cooperative associations (transparency and mutuality);

1995: 22 non profit organisations founded “Cooperativa Verso la Banca Etica” which is looking for shareholder of the future bank (target 7mio Euro);

1999: Banca Etica opened its first branch office in Padova 2000: CTM-Mag becomes Etimos, a microcredit consortium 2003: Etica sgr, ethical funds, opened 2004: First Terra Futura annual eco-social fair, today 90.000

visitors 600 exhibitors 2009: Banca Etica has more than 30.000 members (including

4.500 corporate body) 13 branches in all Italy, 700 Mio. Euro savings

Cultural activityMicrocredit

Ethical funds

BANCA ETICA’S SYSTEM

Terra Futurasocial eco-fair

28-30 may ‘10 Firenze

Valori (monthly Newsp)

Zoes.itSocial networking for responsible economy

Shareholder activismOn ENI & ENEL co.

ethically oriented finance is aware of non economic consequences of economic actions;

access to finance, in all its forms, is a human right;

efficiency and soberness are components of ethical responsibility;

profit produced by the ownership and exchange of money must come from activities oriented towards common well-being and shall have to be equally distributed among all subjects which contribute to its realisation;

PRINCIPLES OF ETHICAL FINANCE

maximum transparency of all operations is one of the main conditions of all ethical finance activities;

the active involvement of shareholders and savers in the company's decision making process must be encouraged;

each organisation which accepts and adheres to the principles of ethical finance undertakes to inspire its entire activity to such principles.

PRINCIPLES OF ETHICAL FINANCE

Institutional Bodies

shareholders’ general assembly

board of directors executive committee board of auditors committee of guarantors direction operational office branch offices

Associative structure:

64 territorial organisation of shareholders

Ethical Committee

Banca Etica structure

Alternative banking Models

Looking for:savers, investors, shareholders, entrepreneurs,

managers and financial intermediaries

to develop values driven cultures that reflect their acknowledged responsibility for the social and

environmental impact of their activities.

Offer choice of conscientious and transparent savings and investment

Banking business: professional, innovative and coherent to principles

Internal shareholder democracy and participation Participation in the public debate on local and global finance

regulation Double evaluation of loans: capacity of redemption of the

loan + impact on the environment and the society Collaborative initiatives, joint ventures and partnerships with

other banks (also not alternative ones)

Alternative Models: institution

Alternative Models:

what to do or to finance

Microfinance: individuals and MFI Social entrepreneurs running green and social

businesses No-profit organizations Low impact lifestyles patterns Social Cooperatives (welfare, production,

services) Mutualism and local governments Ethical funds (best in class approach) Shareholder activism / capitalism democracy

Alternative Models

Coalition about

alternative financial experience:

www.inease.org

www.febea.org

Global alliance

(for banking on values)

Some figures of Global

alliance

combined assets exceeding USD 10 billion> 7 million customers they employ more than 45,000 people.combined equity exceeding USD 940 million.average growth rates of 24%generate a decent and stable return on

equity, both in financial terms and in added social value

they have shown remarkable resistance in the face of the financial crisis.

Are those figures relevant?

2008 data (euro)

Bank savings in Italy 1 613 000 000 000

Banc etica’s savings 700 000 000

This means about 0,043 % of the market!!!

But….

Are those figures relevant?

A recent survay by demos (www.demos.it,

ott09) shows that:Transparency is the most popular

request to banksBanca Etica is known and appreciate

by about 10% of Italian populationPeople have a very poor confidence

in traditional banking

ConclusionsPositive There are many possibilities of alternative banking Growing sector, Growing interest, business

opportunitiesObstacles: Unfair competition, “fake” alternative approach Inefficiency due to little figures Cultural behavior of Not-responsible economy Financial rules thought for big “traditional” players

THE NET OF BANCA ETICA

13 Branches and 2 more opening;

27 Financial Promoters;

64 Local Shareholders Groups;

201 employees and co-workers

Update January 2009

SERVICES

bank accounts, for individuals and organisations, and further services such as direct debit cards, credit cards, home banking, credit transfer in Italy and abroad, bancalight (banking operations management from the mobile phone), internet banking;

certificates of deposit; saving books; debentures, bonds; investment funds Responsible Values of Etica Sgr; foreign services: bank accounts and related services;