#12: Your impact with banking, Cheeky C

What happened before: After their unexpected encounter on a dark, cold night in Toronto, Cheeky C and Great G decided to embark on a journey, each unknowingly with different destinations in mind. Cheeky C wants to discover her identity and purpose, while Great G aims to realize a vision of global health through the world of finance. In Europe, they make their first stunning discovery about the power of  banking and where it comes from…

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After breakfast, Cheeky C feels much better. She really likes Great G’s friend. His name is Jake J, and he is responsible for a team dealing with the banks’ sustainable investments in renewable energy. He is really friendly, treats everyone around him with sincere respect and honesty, and knows a lot about social banking. Even more than Great G. As they tell Cheeky C, they both got to know each other decades ago in Sweden during a Summer School for Social Banking. A friendship that has never been broken. Cheeky C feels at home.

‘You know, Cheeky C, that banks are among the most powerful institutions in society’, Jake J says to her. ‘But do you know why?’

Cheeky C feels excited. Of course, she knows the answer – she learned that in Toronto! ‘As I learned from Great G, banks are so powerful because they can finance the production of a lot of Beaver Tails.’

Jake J tilts his head and chuckles. ‘Hm, interesting… I clearly see the influence of a hungry stomach and some Canadian snacks here…’

Great G tries to look as innocent as possible.

Cheeky C continues. ‘But Great G also taught me that banks are so powerful because even politicians, investors, companies, and people like you and me have to go to a bank to get money. Everyone. Money plays a central role in today’s society, and with that, banking institutions that give us money have incredible power.’

Thumbs up from Jake J. ‘Well done, well done… So banks are so powerful because they control all money flows in our society. But do you know where banks get all their money from?’

He chuckles again, seeing the puzzled look on Cheeky C’s face. ‘Time to go beyond Beaver Tails. Time for… Dutch Stroopwafels!’

Cheeky C’s puzzled look doesn’t get better as he pulls out a package of round, thin, golden-brown waffles from his bag. ‘To understand where banks’ money comes from, and thus their monetary power, you need to understand a bank’s balance sheet – and the power you have.’

‘A balance sheet? What’s that?’ Cheeky C feels a rush of curiosity.

‘An overview of the inflows and outflows of a bank’s money. How much money comes in, and how much is put into assets. Ideally, both should be balanced. In the case of conventional banks, a lot of their assets are in sick finances: the finances of fossil fuels. They have super weak guidelines. Just as Great G told you before I jumped into your conversation.’

Jake J pauses and points at the waffles in his hand. ‘So, when we find out where the incoming money comes from, we know where the power for change comes from. Are you ready for the truth?’

Cheeky C smiles – cheekily. ‘If the truth means eating waffles, then I am.’

‘Awesome. Deal.’ Jake J takes one waffle out. ‘This waffle represents the total amount of a bank’s income. Great G, you are German and know about the involvement of your country’s banking institutions in dirty business. How much money went into the Deutsche Bank in 2023?’

Great G’s fingers dance on the screen of her phone. ‘Deutsche Bank’s total liabilities and equity is, according to their 2023 annual report on page 213… around €1.3 billion.’[1]

‘And how much is coming from deposits?’

‘That is… Around €622 million, almost half.’[2]

Jake J breaks the waffle in half. He hands one half over to Cheeky C. ‘Here. Your power.’

The little girl is dangerously close to breaking the record of the most puzzled look on a child’s face ever. ‘My power? How?’

‘Because if you grow older, you will own a bank account. A deposit. And by that, you will finance a bank. So, a part of a bank’s power will ultimately come from your hands. And from your friends, your family members, your employer – everyone who has a bank account. Almost half, if you become a client of Deutsche Bank. Do you understand now the power that you have as an individual, that everyone with a bank account has? The power for change.’

‘For change?’ The little girl starts to think. ‘Hm… Do you mean changing by opening my bank account at a social bank? They have the strictest criteria for using my money. I learned that from Great G before you joined. No fossil fuels, no arms industry, no child labour. Only healthy finance.’

Jake J smiles all over his face. ‘Correct! Now, let’s enjoy this insight with some Stroopwafels…’

Cheeky C’s question interrupts the three’s content sound of chewing. ‘Wait… Just opening an account at a bank is easy. But what about all the adults who have a bank account at a harmful bank and want to move – how can they do that? I can imagine it involves a lot of time and bureaucracy…’

Jake J and Great G shake their heads. ‘Not at all. But many people think that and become deterred…’ Great G sighs. ‘I had so many debates in my life. But it is actually quite easy.’

‘Oh yes,’ Jake J adds. ‘All you need is courage… And a few clicks. Let me show you.’ He turns Great G’s phone, where the old lady has already researched the needed website, to Cheeky C.

‘You start with a background check of our current bank.

• Does it have weak guidelines for the use of your money, ultimately supporting businesses that don’t care much about society’s and our planet’s health?
• You can check your bank with the Fair Finance Guide.
• Or you can check whether your bank is B Corp [3] certified, which is one of the highest sustainable standards in business certification.
• Or you check whether your bank is a member of the Global Alliance for Social Banking on Values [4], short form GABV. In this network, only social banks with super-strict criteria can be members.

Here, you may face what you fear most: namely, that your bank is a bad one and you need to move your account.

• In this case, step two: you check the social banking alternatives in your country with the members’ map on the GABV website and choose the social bank that fits best for you.

The last steps are kinda simple and self-explanatory.

You open your new social bank account online, inform all your payment partners about your new bank data, and close your old bank account.’

Cheeky C is impressed. ‘Wow! That’s actually quite easy!’

‘Yes, it takes you less time than watching an episode of Bridgerton…’ Jake J rolls his eyes. ‘If we had a story about social banking that is as thrilling for people as those Netflix series, the world would have long since been changed for the better.’

Suddenly, Great G looks thoughtful. A mischievous smile lights up her wrinkled face. ‘Hm… You just gave me an idea…’

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Sources:

[1] See Deutsche Bank. 2024. Annual report 2023, p. 213. Available online from: https://investor-relations.db.com/files/documents/annual-reports/2024/Annual-Report-2023.pdf, last accessed 01 June 2024.

[2] Ibid.

[3] The “B Corp Movement” is a global network of companies that actively promote a sustainable, social and fair future. There are over 5,000 certified B Corporations worldwide, including Patagonia, The Guardian and Sympatex. B Corporations are companies that want to achieve greater sustainability and are committed to regularly measuring and improving their social and environmental. More on: https://www.bcorporation.net/en-us/.

[4] More on GABV.org/About us: „The Global Alliance for Banking on Values (GABV) is an international network of frontrunner organisations and leaders in the banking industry that use finance to serve people and the planet. Our collective goal is to make the banking system more transparent and support positive economic, social and environmental change.”