BANKING AND SUSTAINABLE DEVELOPMENT – AN ANALYSIS

An attempt is made in this paper is to analyse the role of banks in sustainable development. Banks have almost certainly never been less popular. From mis-sold pensions to mis-reported Libor rates – the rate at which banks lend to each other bankers seem to be too blamed for most of our woes. Many solutions have been put forward, including splitting the "casino" elements from the rest, shaking up board membership and toughening regulation. One question that doesn't seem to have been asked, however, is whether any of this would make banking more sustainable. The prescriptions for avoiding a repeat of the crisis are certainly aimed at more financial sustainability within the financial system avoiding bank busts and market mayhem. It's fair to say that this has to be the top priority. If they don't survive they can't contribute in any way. But this has little to do with economic stability avoiding asset price bubbles, trading instruments and practices which destabilise the broader economy.