The Case for California’s State Public Bank

The Case for the California State Public Bank was authored by Neha Singh of Berkeley’s Goldman School of Public Policy, commissioned by Rise Economy in collaboration with the California Public Banking Alliance. The report provides a roadmap for launching a California State Public Bank through the existing framework of the Infrastructure Bank (IBank). It’s not just about exploring possibilities—it’s about harnessing them strategically to address crucial economic sectors such as affordable housing, green energy, small business empowerment, and pioneering ownership models across the state.

The capstone proposes a transformative shift by advocating for a partner bank model, inspired by the US’s successful public bank, the Bank of North Dakota. This approach would significantly boost the IBank’s effectiveness by supporting local economic resilience through partnerships with local lenders and Financial Development Corporations (FDCs), thereby democratizing capital control. With an expanded mandate, the IBank could include not only affordable housing and infrastructure projects but also initiatives that tackle climate change and social equity in economic resource distribution.

The report points out the crucial need for operational and governance reforms for the IBank to transition into an effective public banking entity. It lays bare issues of inadequate oversight and engagement and proposes strategic reforms such as revitalizing board composition, ensuring active and transparent governance, and aligning the bank’s operations with rigorous audit and compliance standards.

This capstone blends practical financial strategies with an approach to systemic economic reform. It posits the public bank as a linchpin in California’s economic ecosystem, capable of driving significant social and infrastructural development, thus making a compelling case for rethinking, reforming, and revitalizing the financial frameworks that underpin California’s most pressing economic needs.

Download and read the report.

Read the press release.