Social Aspects of the Banking System

The author rests on the US constitution and the German Basic law for supporting his argument on how the original relatively fair capitalism was lately converted into a vulgar and brutal system. Past years clearly indicate that the banking system, as an authentic representative of the capitalist regime, failed in providing a decent service to the general public. Another sign for the failing systemʹs limits was the significant large scale of government involvement in the economy by investing huge amounts of money in contrary to the classical free market proponentsʹ opinions. The proposed reformed paradigm, most pertinent for our time is the Social-Capitalism model. It consisted of four major principles: (1) Building a dynamic balance between Capital and Labor interests, (2) Endorsing Collaboration rather than sticking with competition (3) Promoting Private–Public Partnerships (PPP) and (4) Combining several alternatives rather than adopting one only. The author sees two distinct roles for the banking system, a. the classical and b. the social-oriented one. Banking should be divided according to these two roles. The Communal banking system should fulfill three objectives: a. meeting the financial needs of the citizens, b. satisfying small business financial requirements, and c. complying with regulatory and environmental demands. The strategy for meeting these goals rests on the following assumptions: (1) Democratic states need very competent banking systems, (2) Communal banking system is the most appropriate financial tool for meeting social needs, (3) A competent banking system is a promising platform for development and prosperity, and (4) A reliable banking system, at present, must be transparent and accountable.