Occupy Wall Street on Alternative Banking
Huffington Post did a great little piece on the Alternative Banking working group that I'm part of. You can find the original article here. I've also pasted it below. Thank you Janell Ross for coming along, and taking an interest.
While weatherworn protesters continue to demonstrate in Zuccotti Park and prepare for winter, one arm of the Occupy Wall Street movement is debating a far larger concern: the architecture of an alternative financial system they say could be inclusive, stable and fair.
On Sunday, nearly 65 think-tank researchers, traders, academics, lawyers and business owners -- some who are so closely connected to the financial industry that they felt it best to participate via the relative anonymity of a teleconference -- gathered for the second meeting of Occupy Wall Street'sAlternative Banking Working Group. One portion of the group will gather again Wednesday night.
This contingent of Occupy Wall Street holds a deep understanding of the financial system, frustration with the way it currently works and a clear recognition of how close the system came to failing in 2008. Some in the room Sunday said they wanted to form a new banking system; others wanted to change what exists through legislative reform. There were those who said the group's primary goal should be slow and deliberative consensus building, and those who want to build tangible programs now, fearing the movement's momentum could soon fade away.
The debate about how to have an orderly conversation about all these things took 45 minutes. In the end, the group divided in two.
"OWS encompasses a number of ideas and concerns," said Carne Ross, a driving force behind the working group. Carne is a former British diplomat and now runs Independent Diplomat, a nonprofit that advises democratic governments and political groups on diplomatic strategy. He is also the author of "The Leaderless Revolution," a book that has been in the works for several years.
"Of course, the common theme is deep disillusionment with the status quo," Ross said. "But what you do about it is not common ground by any stretch of the imagination."
After the two groups split on Sunday, Ross described some of what he called his "blue-sky" ambitions. He said he wants to build a banking system with democratic management, more direct relationships between borrowers and investors and products affordable and attractive to the rich and poor.
Ross rattled off a list of small-scale lending operations already employing some of these principles. The information set several pens and pencils in the group in motion. Then, Ross shared what he sees as his potentially actionable idea: buying a small bank, then growing it into a national institution that operates with the goals Ross described.
Across the room, Mark Anthony sat listening to a discussion of Glass-Steagall, a 1930s law repealed in 1999 that barred commercial banks from owning investment banks. Some attribute the financial crisis to the law's repeal.
"I think it's really unfortunate that something as important as people's financial well being is handled by what are essentially sales organizations," said Anthony, a former member of the American Stock and New York Cotton Exchanges. Today, he works as a financial adviser and was at the meeting to explore his personal interests, he said.
Anthony was drawn to the working group after listening to colleagues make fun of Occupy Wall Street. Anthony first went down to Zuccotti Park in September. Yes, there were conspiracy theorists and a drum circle. But, there were also people raising legitimate issues about the banking rules that contributed to the financial crisis, he said.
Inside Ross's blue-sky subgroup, a man suggested employing a progressive stack -- an approach to common to Occupy Wall Street meetings that tries to ensure the voices of often marginalized groups such as minorities and women are heard. It was a refreshing change for Ann Rutledge, a former Moody's rating analyst who co-owns and operates R&R Consulting, a securities rating and advisory company in New York. It is a male dominated industry, she said.
This week, Rutledge and a team of writers will publish a paper in The Journal of Structured Financecalling for periodic structured securities ratings so that those performing poorly or structured irresponsibly can be identified early. She would also like to see a uniform, objective and public set of standards applied by rating agencies, she said. On Sunday, she explained the concept to the group.
"Increased transparency, that would truly frighten the big traditional banks," she said.
Several people nodded or raised their hands and wiggled their fingers, the Occupy Wall Street version of broad applause.
"The fact is," said Ross, "people like [JP Morgan Chase Chairman and CEO] Jamie Dimon are busy running around not just in D.C., but London and Paris getting banking legislation watered down right now. There is not one person in Zuccotti Park that has the same kind of access that Jamie Dimon has. So we must consider building institutions that, simply put, meet the people's needs."