WHEN GAPS BETWEEN THE FINANCIAL- AND REAL ECONOMY ARE INCREASING -
then Fair Play Reform and Pro-Active Measures are needed
Fast changing financial-, monetary- and trade policies have unforeseen consequences in times of pandemics, warfare, supply-side problems, high debt-levels and inflation - like socio-economic changes, fear and turmoil.
Financial crises can become contagious - caused by lack of trust, lack of real financial reform and lack of institutional changes with social impact. Corporatism may prevail, if backed by influential macro-economists with distance to- and little insight in real economies and behavior.
Then real reforms and institutional changes become mandatory - also due to digitization- and climate challenges.
Financial markets have been changed by political (de)regulation and steering of financial stability - as well as by FINTECH, Securitization of Financial Instruments & Products and rapid Expansion of Funds Management.
The GAP between the financial- and the real economy is increasing - due to fast growing, fluctuating transaction volumes. There are few banks financed mainly by known depositors - enjoying a local, protected market for lending at a fair margin. What are supposed to act as banks by accepting deposits from the general public as to national licenses - many have become multi-role players with cross-selling strategies stimulated by internal bonus schemes.
"Best result for the customer" is not the "Raison d'Être" of most financial institutions. Therefore, they do not primarily act as basic infrastructure for local-, regional- and cross-border economic circulation.
Look to the next Page of this Website: "Financial Models & Value Creation" for an overview of different applications and purposes:
A) Investment firms; B) Corporate Activities of Multi-Role Financial Groups; C) SMEs, hereunder family-owned firms; D) The fund management sector, which covers different types of funds: E) Social Enterprise - followed by a Case on Bankier.co's initiative, which has faced illegal favoring of financial incumbents by national authorities.
Is Governance of Financial Markets adequate - or lagging behind actual developments in Real Economies? What about needed institutional- and structural Changes?
Politicians (the legislators), Central Banks (defined as lenders of last resort) and National Financial Authorities (the regulators) should act based on advice from Independent Pro-Active Commissions (IPACs) on Financial Markets. Instead, they react to trends, which they see by supportive- and/or intrusive policies - often with distance to realities and market behavior. Therefore, we are all exposed to increasing systemic risks, which may become contagious cross borders by lack of trust.
Please find below a Postscript on Trust - with a historic-, systemic- and resource-oriented perspective.
And before that Postscript - look to a Summing Up of Bankier.co's initiative in its context; namely,
"The issue at stake is financial reform".
More details on Governance of Financial Markets:
Politicians run budgets, face media and lobbies of special interests. They tend to refer matters to the central bankers and financial authorities. The professions and academia influence media and special interests. That's today's corporatism in a nutshell.
Central banks apply monetary policies by pegging interest rates-, offering access to liquidity- and currency-measures based on macro-economic modelling and historic data for steering financial stability and inflation.
FINTECH and securitization adds complexity to financial market operations and gives rise to unforeseen risks. Financial players and -institutions also react to steering of financial stability - some times causing more instability.
Financial authorities tend to close ranks with the "Names" of financial markets and the incumbents of the financial industry. The latter is a very influential corporate lobby - cross borders.
Questions to the above:
1) Why are Pro-Active Governing Bodies lacking - e.g. Senate Committees and Independent Commissions on Financial Markets?
2) Is there an entente between administrators to avoid an Independent Commission on Financial Markets?
3) Why is there underserved- or even uncontested market spaces in financial markets vital to real economies?
About creating a market structure, which can reduce the GAP between the financial- and the real economy
Such a structure has a diversity of different businesses and company managements as well as participants and owners. It should be based on real financial reform and pro-active measures by an Independent Pro-Active Commission (IPAC) for financial markets.
The financial structure can be divided into 2-two categories:
I. Risk-oriented management in financial companies and multi-role financial groups, including securities companies - favored by regulatory financial authorities and the Central Bank;
II. Other not favored companies, owners and market participants. However, some companies are regulated to protect certain participants - and some may experience damages due to above-mentioned favoring.
Re I: Financial companies and financial groups according to national legislation - as well as securities companies according to separate legislation and/or EU’s MiFID-directive
This is about risk-oriented management in companies with several roles and licenses "under the same hat". Managers of financial companies and financial groups may have the right to receive deposits from an undetermined circle - as well as to borrow funds from markets and the central bank as preferred business models of national financial stability-steering. Financial groups can also own investment-, brokerage- and asset management companies, e.g. organized in "Markets”-divisions. Financial companies and financial groups work with “Other People's Money”, which requires trust. Therefore, they are regulated - and their depositors/lenders may be partially protected. Owner-governance is often weak due to a spread, inactive ownership. The company's operational management is delegated power to continuously risk-assess the pricing of placements with different maturities - some exposed to currency- and monetary policy risk.
The multi-role financial group-model was introduced in Europe 1987/-88 by deregulation of financial markets. It opened up for consolidations and acquisitions. Today, financial companies and financial groups are a powerful special interest. As already mentioned - financial groups can have several roles and licenses "under the same hat" and practice so-called "cross-selling strategies" - driven by transaction fees and internal bonus schemes. This can result in collusion and network corruption rewarded with career opportunities.
Note: The USA deregulated financial markets in 1999 by repeal of the Glass-Streagall Act, which had separated investment- and commercial banking since 1933. Thereafter financial authorities - Worldwide - have tacitly chosen to disregard collusion and cross-selling, which benefit efficient transaction flows and profitability. An Independent Pro-Active Commission (IPAC) for the financial markets should shed light on this and other practices as well as the state of structural conditions and steering of financial stability under the auspices of macro-economists with a distance to- and little insight into the real economy.
Re II: Other companies, owners and participants in media and markets. Some of them have achieved advantages by lobbying. Innovative enterprises are often ignored. And certain businesses are strictly regulated to protect participants – for example:
A) Self-directed participants in mutual funds for shares- and bonds with the right to be redeemed;
B) Specialized funds, e.g. Private-equity-, Venture- and Hedge Funds, managed by general partners of "creative destruction". The participants have little- or no influence;
C) Equity capital- and debt-financed crowdfunding - soon owned or controlled in practice by financial groups/securities firms;
D) Social enterprises exist in many forms - e.g. as mutual social enterprises and cooperatives.
More details on A) - D):
The above other companies, owners and participants in media and markets - as well as their needs and behavior - are described in more detail below and on other Pages of this website.
Likewise, Collaborative Value Networks (CVNs) for Impact Investing, which have "No-Group-Structures" to combine a role-divided business model and an open ownership model - for example organized by Bankier-firms, which operate on their own account - and monitor competent trustees/expertise.
A substantiated Assertion: There is a vast underserved market space in financial markets...
A reminder: The bulk of activities in the real economies of developed nations consist of Small- and Mid-sized Enterprises (SMEs), hereunder family-owned firms, and also co-responsible households active in business. Most of them are NOT “Names” in media and markets. Therefore, they are underserved by the transaction-fee driven incumbents of today’s financial industry - looking for repeat business with “Names” of financial markets.
These SMEs and households active in business are in need of affordable access to competent trustees/fiduciaries provided by for example Social Enterprises for Impact Investing - organized as Collaborative Value Networks (CVNs).
Assertion: A CVN-Approach for Impact Investing can cater for this underserved market space. Affordable access to competent trustees/fiduciaries can start peer-to-peer-relations between owners of SMEs and chosen confidants. Look to the above Page: "Activities for Owner-Enterprise".
A challenge to legislators: Appoint an Independent Pro-Active Commission (IPAC) on Fair Play Financial Reform.
A pre-requisite: Such an IPAC has a free mandate to analyze alternatives as well as to propose pro-active measures - e.g. to address and shed light on:
Regulatory- and other market developments can contribute to scaling-up of Single-Role Alternatives - e.g. "A Social Enterprise for Impact Investing - organized as a Collaborative Value Network (CVN)"
For example: Crowd-funding may become complex activities linked to the financial industry's incumbents - caused by efforts of lobbies - as well as protection of atomists by politicians, regulators and consumer-organizations.
Other challenges are: Effective Reconstruction and Debt Relief to offer the future a better chance.
And there are EU Action Plans for Sustainable Investments.
Note: There are precedents of Social Enterprises in insurance and credit banking - but, not in impact investing co-owned or majority-owned by self-directed capital partners.
Re: A New EU-/EEA regulation on Crowdfunding Service Providers lays down uniform rules across the EU for provision of investment-based and lending-based crowdfunding related to business financing.
There is a deadline for authorisation on November 10, 2023 to promote equity capital- and loan-financed crowdfunding. National initiatives have so far taken place to raise funding for small initiatives and -enterprises, which lack “Names” in media and markets.
In the future the financial authorities of EU/EEA-member nations are likely to interpret- and practice rules in ways, which make crowdfunding operated by licensed securities-firms and banks. They will offer crowdfunding services - for positioning-, public relations- and/or cross-selling purposes.
Other contenders of financial innovation are also popping up. They may e.g. mix crowd-funding, funds management, analyses & market making, access to an exchange for unlisted securities - until SEC-/FSA cry “collusion and/or wolf”.
Re: Pro-active change by reconstruction of businesses will happen in European countries caused by implementation of EU Directive 2019-1023 concerning Restructuring, Insolvency and Discharge of Debt (read: Debt-relief).
It was implemented by EU member nations before July 17, 2021. It resembles the US Chapter 11-rules. This legislation can offer a company protection against its creditors for a period of time decided by a competent specialized court.
In other words - an era of poor extension of credit comforted by- and based on collateral will be over - subject to a reform for debt relief to offer the future a better chance.
Re: The EU Action Plan for Sustainable Investments January 2022
In November 2019 an EU regulation on publication of sustainability information in the financial sector was adopted, and most of the requirements in the regulation were implemented in EU from March 10, 2021.
Real financial innovation can shape effective Impact Investing by:
Cf. The Economist’s 12 Page Briefing on Decentralised Finance (DeFi) September 18th 2021 - and look to a leading FINTECH-professor of Basel University, Fabian Schär, who says that Decentralized Finance (DeFi) has potential to create real, open, transparent and secure financial infrastructure - for Decentralized Autonomous Organizations (DAOs).
A well-founded Assertion:
Role-divided Value Chains, which can offer impartiality, will be under constant attack as long as national authorities and licensed business models do not distinguish sharply between:
Self-directed users of financial services and -instruments can demand impartiality by pluralism - and oppose collusion as well as cross-selling strategies - stimulated by internal bonus schemes/give-up commissions
They can assemble in Social Enterprises for Impact Investing - organized as Collaborative Value Networks (CVNs). Therefore, strategies for- and use of Impact Investing are important R&D areas - also to build Cases for educational purposes.
Collaborative Value Networks (CVNs) for Impact Investing - boosted by Fintech
They can provide perceived improvements to real economies of maritime regions - by assembling strengths from many self-directed investors interested in spreading risk to build capacities and facilitate capital formation.
Such CVN-Approaches for Impact Investing must offer - always at Arm's length - affordable access to trustees/fiduciaries for SMEs without "Names" in media and markets - and for example serve as a "Flanker Bank-Fintech Initiative" for Impact Investing by future Alliances choosing Co-opetition to achieve real financial innovation. Cf. the last four pages of this website:
Reference to The Economist's Special Reports on Financial Markets - a. o.:
The Special Report on February 25th, 2012, which defines "Real financial innovation with social impact"
It pointed e.g. to crowd funding and impact bonds in order to stimulate enterprise/innovation and job creation. At the time the existence of a CVN-Approach for Impact Investing was not known by media and markets.
The Special Report May 4th 2019: "Fintech's Raid on Banks", which focuses on borrowing/lending, account management and payments by mobile phones. There was not a wink about all those SMEs without "Names" in media and markets, who are underserved by incumbents of the financial industry - for example when access to equity capital for pro-active restructuring is concerned. However, Chapter 10 of the Special Report refers to a "Flanker Bank-Fintech Initiative" by an incumbent of the financial industry.
A CVN-Approach for Impact Investing can be scaled-up and boosted by Fintech
It can be carried through according to- or aligned with Bankier.co's participation in HBS.edu New Venture Competition 12-2022. It’s future REACH into the Real Economies of Maritime Regions can be enhanced by real financial innovation with social impact*, scrutiny of corporate doctrines on perceived climate changes** and fair play, general and pro-active measures - e.g. by implementation of general Green Pricing***.
*) A. o. applications of Cyber-secure Fintech benefiting all those without "Names" in media and markets - underserved today by the incumbents;
**) Cf. an article by Gillian Tett in FT Weekend “Capitalism – a new Dawn” Sept. 7, 2019 - look to a “Change the World Issue” of Fortune.com 9-2019.
***) Green Pricing implies processes for improvements by stimulating and/or taxing the actual use of resources and technical standards.
Basic Infrastructure Activities (BIAs), such as banks, should operate as to the intent of public licenses and always put customers' needs first
BIAs should be influenced by citizens/users/participants. Regional development of BIAs is much needed by SMEs. However, BIAs are often organizations with a narrow corporate culture, i.e. controlled by somebody with "power of office", which can open up to possible abuse. Cf. the Latin word: "Imperium".
Remedies to avoid negative impacts of a narrow corporate culture are:
Economic co-responsibility/accountability and empowerment resulting in shared interests - as well as a parallel practice of offering a value proposition to the atomist (read: the individual without influence alone). Thereby any organization can express its purpose (French: Raison d'Être).
This is exactly what a trustee/fiduciary of a Social Enterprise for Impact Investing – organized as a CVN - will do when establishing a peer-to-peer relation with an owner/enterpriser or investor of a SME or a BIA – for example to make a relation better prepared to meet the market. Its CVN also consists of an InvestCo for assembling stakeholders, including capital partners, and a Protection Club for those interested in spreading risk and building capacities to facilitate effective impact investing. For more details look below - and to other pages of this website.
Most Incumbents of the Financial Industry are Multi-Role Financial Groups practicing cross-selling strategies
There should be supplementing, single-role alternatives to the transaction-fee driven financial players with cross-selling strategies stimulated by internal bonuses. Massive stimulus directed to the "Banking Monsters" (“too big to fail”) have not been as productive as the “stealth”, continuous efforts a. o. for job creation by "Community Banking" – without any State support and stimulus.
According to FT.com - US “Community Banking” with less than 1 billion USD in Assets account for > 10% of the financial industry’s total assets, but provides 40% of the financial industry’s capital to small businesses. And some of them are already raiding competitors and themselves by fintech - i.e. by combining new and old.
US Federal Deposit Insurance Corporation (FDIC) has an ongoing initiative to support America's “Community Banking", including a project to gather more knowledge about this understudied sector. FDIC has observed that "Community Banks" are central to USA's job creation. Therefore FT.com asserts: "The idea of being Small / Local / Specialist / Boutique is no longer taboo. Community Banks fit the times. They are the banks that politicians can be seen to embrace". In South America, Europe, the Mid-East, Africa and in Asia the financial structures have different standards, reach and qualities – reflecting their nations’ diversity of industries and cultures – as well as their different exposure to influences from other parts of the World.
According to FT.com - representatives of US Authorities do acknowledge lack of information about today's "Community Banking", which contribute more than others to the real economy. This is also true in other Parts of the World.
A sub group of “Community Banking” are “Utility Banks”. They are mutual saving & loans, credit unions and building societies based respectively on deposits and bond issues – to lend against collateral. Needless to say - they deal primarily with CREDIT-/ DEBT INSTRUMENTS.
Another sub group are Single-Role Investment-/Merchant Activities and Social Enterprises for Impact Investing - organized as Collaborative Value Networks (CVNs)
These investment activities can deal with owner-/enterpriser dynamics and viable innovation in Small and Mid-sized Enterprises (SMEs) based on resources-/competencies in the fields of equity-capital financing, ownership-dilemmas and owner-governance. The CVN-approach can reach into the real economies of maritime regions by means of Regional Network Partners (RNPs) exercising the role of trustee/fiduciaries in peer-to-peer relations with owners/enterprisers and investors of Small and Mid-sized Enterprises (SMEs), hereunder family-owned firms, as well as directors of regional basic infrastructure activities. Most SMEs and regional basic infrastructure are not "Names" in media and financial markets. Therefore, they are underserved by transaction-fee driven financial players.
Note: SMEs stand for more than 80% of BNP in developed nations and an even larger share of Job creation. Such initiatives can reposition Investment-/ Merchant Activities and position a CVN-Approach to assemble liable capital from many. Thereby capacities can be built by systematic spreading of risk to facilitate e.g.: Access to intermediate financing and/or EQUITY CAPITAL.
The issue at stake is financial reform
Please browse this Page on the topic – including a Summing Up of Bankier.co's Collaborative Value Network (CVN)-Approach for Impact Investing, which follows below.
SMEs, hereunder family-owned firms, need affordable access to trustees/fiduciaries and other expertise, who act as impartial "Wedges" - always at arm's length to insurers, brokers, banks and fund managers.
SMEs also need “Bridges” between Enterprise and Wealth – for raising capital and spreading risk.
Therefore, Bankier.co’s initiative can contribute to real financial reform; namely:
Please evaluate Bankier.co's CVN-Approach for Impact Investing as an innovative- and supplementing alternative to multi-role financial groups and other transaction-fee driven players
A Consortium of Alliances/Catalysts are initial scalers. They choose co-opetition to achieve real financial innovation – benefiting “customers and customers’ customers”.
Parallel recruitment of Regional Network Partners (RNPs) help to organize competent trustees in maritime regions, where needs of owners/enterprisers and investors are similar everywhere.
Both Alliances and RNPs hold negative control (40%) of the vote-rich A-shares in a shared “InvestCo”. In the role of a protector Bankier.co holds the rest (20%).
Underserved Small- and Mid-sized Enterprises (SMEs), hereunder family-owned firms, assemble for access to affordable- and competent trustees. Therefore, they choose to become Self-directed Capital Partners of the CVN-Approach. In the future – the shared “InvestCo” (Restru-Reorg AS/Ltd.) will be majority-owned by the Self-directed Capital Partners - owning vote-weak B-shares to avoid becoming “insiders”.
Note: They have a right, but not an obligation, to become Members of a Protection Club. Each member has an individual master account, which they are free to increase or reduce.
The Stakeholders of the CVN-Approach along with Members of the Protection Club and Impact Bond-holders can assemble, spread risk and build capacities to facilitate effectively a. o. Pro-Active Restructuring & Reorganization (PARR) - and they avoid extreme management fees. The “No-Group-Structure” of the CVN-Approach combines a Role-divided Business Model and an Open Ownership Model. Such a structure can attain a multiplier-effect – making the CVN-Approach a vital Financial Model for Value Creation with reach beyond the financial economy – i.e. into the real economies of maritime regions.
A Postscript on Trust - with a historic-, systemic- and resource-based perspective
Trust can prevail if- and when transparent, deliberative pluralism opens up for Collaborative Value Networks, Impartiality, Transparency, Pro-Active Restructuring - as well as Cyber-security backed by a UN Intl. Court of Cyber Crimes.
2023: In times of pandemics, warfare, supply-side problems, high debt-levels and inflation - fast changing trade- and monetary policies trigger new, unforeseen financial crises - contagious caused by lack of trust;
2021: An era of poor credit extension based on collateral may end in EU/EEA - subject to a debt relief-reform;
2017: Cyber-secure FINTECH can help scale-up Collaborative Value Networks for self-directed participants;
1999: The Repeal of US Glass-Steagall Act - resulted in favoring, collusion and a financial crisis (2008);
1993: The use of Internet grew exponentially by 3G. But, it also resulted in a Dot.com-bubble (2000);
1987: City of London abolished its divide between roles – e.g. acceptance houses and clearing banks;
1700: Northern Europe expanded by use of checks, acceptances and charging interest - based on trust;
1400: The Catholic Church favored the powerful by a ban on charging interest - like other orthodoxies…
then Fair Play Reform and Pro-Active Measures are needed
Fast changing financial-, monetary- and trade policies have unforeseen consequences in times of pandemics, warfare, supply-side problems, high debt-levels and inflation - like socio-economic changes, fear and turmoil.
Financial crises can become contagious - caused by lack of trust, lack of real financial reform and lack of institutional changes with social impact. Corporatism may prevail, if backed by influential macro-economists with distance to- and little insight in real economies and behavior.
Then real reforms and institutional changes become mandatory - also due to digitization- and climate challenges.
Financial markets have been changed by political (de)regulation and steering of financial stability - as well as by FINTECH, Securitization of Financial Instruments & Products and rapid Expansion of Funds Management.
The GAP between the financial- and the real economy is increasing - due to fast growing, fluctuating transaction volumes. There are few banks financed mainly by known depositors - enjoying a local, protected market for lending at a fair margin. What are supposed to act as banks by accepting deposits from the general public as to national licenses - many have become multi-role players with cross-selling strategies stimulated by internal bonus schemes.
"Best result for the customer" is not the "Raison d'Être" of most financial institutions. Therefore, they do not primarily act as basic infrastructure for local-, regional- and cross-border economic circulation.
Look to the next Page of this Website: "Financial Models & Value Creation" for an overview of different applications and purposes:
A) Investment firms; B) Corporate Activities of Multi-Role Financial Groups; C) SMEs, hereunder family-owned firms; D) The fund management sector, which covers different types of funds: E) Social Enterprise - followed by a Case on Bankier.co's initiative, which has faced illegal favoring of financial incumbents by national authorities.
Is Governance of Financial Markets adequate - or lagging behind actual developments in Real Economies? What about needed institutional- and structural Changes?
Politicians (the legislators), Central Banks (defined as lenders of last resort) and National Financial Authorities (the regulators) should act based on advice from Independent Pro-Active Commissions (IPACs) on Financial Markets. Instead, they react to trends, which they see by supportive- and/or intrusive policies - often with distance to realities and market behavior. Therefore, we are all exposed to increasing systemic risks, which may become contagious cross borders by lack of trust.
Please find below a Postscript on Trust - with a historic-, systemic- and resource-oriented perspective.
And before that Postscript - look to a Summing Up of Bankier.co's initiative in its context; namely,
"The issue at stake is financial reform".
More details on Governance of Financial Markets:
Politicians run budgets, face media and lobbies of special interests. They tend to refer matters to the central bankers and financial authorities. The professions and academia influence media and special interests. That's today's corporatism in a nutshell.
Central banks apply monetary policies by pegging interest rates-, offering access to liquidity- and currency-measures based on macro-economic modelling and historic data for steering financial stability and inflation.
FINTECH and securitization adds complexity to financial market operations and gives rise to unforeseen risks. Financial players and -institutions also react to steering of financial stability - some times causing more instability.
Financial authorities tend to close ranks with the "Names" of financial markets and the incumbents of the financial industry. The latter is a very influential corporate lobby - cross borders.
Questions to the above:
1) Why are Pro-Active Governing Bodies lacking - e.g. Senate Committees and Independent Commissions on Financial Markets?
2) Is there an entente between administrators to avoid an Independent Commission on Financial Markets?
3) Why is there underserved- or even uncontested market spaces in financial markets vital to real economies?
About creating a market structure, which can reduce the GAP between the financial- and the real economy
Such a structure has a diversity of different businesses and company managements as well as participants and owners. It should be based on real financial reform and pro-active measures by an Independent Pro-Active Commission (IPAC) for financial markets.
The financial structure can be divided into 2-two categories:
I. Risk-oriented management in financial companies and multi-role financial groups, including securities companies - favored by regulatory financial authorities and the Central Bank;
II. Other not favored companies, owners and market participants. However, some companies are regulated to protect certain participants - and some may experience damages due to above-mentioned favoring.
Re I: Financial companies and financial groups according to national legislation - as well as securities companies according to separate legislation and/or EU’s MiFID-directive
This is about risk-oriented management in companies with several roles and licenses "under the same hat". Managers of financial companies and financial groups may have the right to receive deposits from an undetermined circle - as well as to borrow funds from markets and the central bank as preferred business models of national financial stability-steering. Financial groups can also own investment-, brokerage- and asset management companies, e.g. organized in "Markets”-divisions. Financial companies and financial groups work with “Other People's Money”, which requires trust. Therefore, they are regulated - and their depositors/lenders may be partially protected. Owner-governance is often weak due to a spread, inactive ownership. The company's operational management is delegated power to continuously risk-assess the pricing of placements with different maturities - some exposed to currency- and monetary policy risk.
The multi-role financial group-model was introduced in Europe 1987/-88 by deregulation of financial markets. It opened up for consolidations and acquisitions. Today, financial companies and financial groups are a powerful special interest. As already mentioned - financial groups can have several roles and licenses "under the same hat" and practice so-called "cross-selling strategies" - driven by transaction fees and internal bonus schemes. This can result in collusion and network corruption rewarded with career opportunities.
Note: The USA deregulated financial markets in 1999 by repeal of the Glass-Streagall Act, which had separated investment- and commercial banking since 1933. Thereafter financial authorities - Worldwide - have tacitly chosen to disregard collusion and cross-selling, which benefit efficient transaction flows and profitability. An Independent Pro-Active Commission (IPAC) for the financial markets should shed light on this and other practices as well as the state of structural conditions and steering of financial stability under the auspices of macro-economists with a distance to- and little insight into the real economy.
Re II: Other companies, owners and participants in media and markets. Some of them have achieved advantages by lobbying. Innovative enterprises are often ignored. And certain businesses are strictly regulated to protect participants – for example:
A) Self-directed participants in mutual funds for shares- and bonds with the right to be redeemed;
B) Specialized funds, e.g. Private-equity-, Venture- and Hedge Funds, managed by general partners of "creative destruction". The participants have little- or no influence;
C) Equity capital- and debt-financed crowdfunding - soon owned or controlled in practice by financial groups/securities firms;
D) Social enterprises exist in many forms - e.g. as mutual social enterprises and cooperatives.
More details on A) - D):
The above other companies, owners and participants in media and markets - as well as their needs and behavior - are described in more detail below and on other Pages of this website.
Likewise, Collaborative Value Networks (CVNs) for Impact Investing, which have "No-Group-Structures" to combine a role-divided business model and an open ownership model - for example organized by Bankier-firms, which operate on their own account - and monitor competent trustees/expertise.
A substantiated Assertion: There is a vast underserved market space in financial markets...
A reminder: The bulk of activities in the real economies of developed nations consist of Small- and Mid-sized Enterprises (SMEs), hereunder family-owned firms, and also co-responsible households active in business. Most of them are NOT “Names” in media and markets. Therefore, they are underserved by the transaction-fee driven incumbents of today’s financial industry - looking for repeat business with “Names” of financial markets.
These SMEs and households active in business are in need of affordable access to competent trustees/fiduciaries provided by for example Social Enterprises for Impact Investing - organized as Collaborative Value Networks (CVNs).
Assertion: A CVN-Approach for Impact Investing can cater for this underserved market space. Affordable access to competent trustees/fiduciaries can start peer-to-peer-relations between owners of SMEs and chosen confidants. Look to the above Page: "Activities for Owner-Enterprise".
A challenge to legislators: Appoint an Independent Pro-Active Commission (IPAC) on Fair Play Financial Reform.
A pre-requisite: Such an IPAC has a free mandate to analyze alternatives as well as to propose pro-active measures - e.g. to address and shed light on:
- Financial Authorities - they must not run political- and/or macro-economic errands of monetary policies - or favor the incumbents of the financial industry. The latter is illegal in developed financial markets;
- Investment Firms, Funds mgmt. and other financial institutions - they should all comply with the same accounting- and liquidity rules everywhere - and submit plans for pro-active reconstruction or orderly winding up if failing;
- Social Enterprises for Credit Banking and Insurance - and also for Impact Investing - organized as Collaborative Value Networks (CVNs) for Self-directed Capital Partners. The latter are "No-Group-Structures". Therefore, they are supplementing Alternatives to Multi-Role Financial Groups.
Regulatory- and other market developments can contribute to scaling-up of Single-Role Alternatives - e.g. "A Social Enterprise for Impact Investing - organized as a Collaborative Value Network (CVN)"
For example: Crowd-funding may become complex activities linked to the financial industry's incumbents - caused by efforts of lobbies - as well as protection of atomists by politicians, regulators and consumer-organizations.
Other challenges are: Effective Reconstruction and Debt Relief to offer the future a better chance.
And there are EU Action Plans for Sustainable Investments.
Note: There are precedents of Social Enterprises in insurance and credit banking - but, not in impact investing co-owned or majority-owned by self-directed capital partners.
Re: A New EU-/EEA regulation on Crowdfunding Service Providers lays down uniform rules across the EU for provision of investment-based and lending-based crowdfunding related to business financing.
There is a deadline for authorisation on November 10, 2023 to promote equity capital- and loan-financed crowdfunding. National initiatives have so far taken place to raise funding for small initiatives and -enterprises, which lack “Names” in media and markets.
In the future the financial authorities of EU/EEA-member nations are likely to interpret- and practice rules in ways, which make crowdfunding operated by licensed securities-firms and banks. They will offer crowdfunding services - for positioning-, public relations- and/or cross-selling purposes.
Other contenders of financial innovation are also popping up. They may e.g. mix crowd-funding, funds management, analyses & market making, access to an exchange for unlisted securities - until SEC-/FSA cry “collusion and/or wolf”.
Re: Pro-active change by reconstruction of businesses will happen in European countries caused by implementation of EU Directive 2019-1023 concerning Restructuring, Insolvency and Discharge of Debt (read: Debt-relief).
It was implemented by EU member nations before July 17, 2021. It resembles the US Chapter 11-rules. This legislation can offer a company protection against its creditors for a period of time decided by a competent specialized court.
In other words - an era of poor extension of credit comforted by- and based on collateral will be over - subject to a reform for debt relief to offer the future a better chance.
Re: The EU Action Plan for Sustainable Investments January 2022
In November 2019 an EU regulation on publication of sustainability information in the financial sector was adopted, and most of the requirements in the regulation were implemented in EU from March 10, 2021.
Real financial innovation can shape effective Impact Investing by:
- Decentralized Finance (DeFi) and Decentralized Autonomous Organizations (DAOs); e.g. Collaborative Value Networks (CVNs) boosted by FINTECH/distributed ledger technologies;
- Building REACH beyond the financial economy - to set new standards benefiting also underserved “atomists”* without “Names” in media and markets.
*) An “atomist” is an individual without influence alone – e.g. an owner/enterpriser of a “SME”.
Cf. The Economist’s 12 Page Briefing on Decentralised Finance (DeFi) September 18th 2021 - and look to a leading FINTECH-professor of Basel University, Fabian Schär, who says that Decentralized Finance (DeFi) has potential to create real, open, transparent and secure financial infrastructure - for Decentralized Autonomous Organizations (DAOs).
A well-founded Assertion:
Role-divided Value Chains, which can offer impartiality, will be under constant attack as long as national authorities and licensed business models do not distinguish sharply between:
- National Core Networks for Cyber Security - shared by licensed operators to reduce end users' cost;
- Licensed national Telecom-operators - and e-Com / social media;;
- Banks and settlement systems;
- Insurance- and investment services, hereunder fund management.
- Other operators of basic- and critical infrastructure.
Self-directed users of financial services and -instruments can demand impartiality by pluralism - and oppose collusion as well as cross-selling strategies - stimulated by internal bonus schemes/give-up commissions
They can assemble in Social Enterprises for Impact Investing - organized as Collaborative Value Networks (CVNs). Therefore, strategies for- and use of Impact Investing are important R&D areas - also to build Cases for educational purposes.
Collaborative Value Networks (CVNs) for Impact Investing - boosted by Fintech
They can provide perceived improvements to real economies of maritime regions - by assembling strengths from many self-directed investors interested in spreading risk to build capacities and facilitate capital formation.
Such CVN-Approaches for Impact Investing must offer - always at Arm's length - affordable access to trustees/fiduciaries for SMEs without "Names" in media and markets - and for example serve as a "Flanker Bank-Fintech Initiative" for Impact Investing by future Alliances choosing Co-opetition to achieve real financial innovation. Cf. the last four pages of this website:
- A Columbus' Egg to effective Impact Investing;
- The Value Chain with a Pdf for downloading;
- Funds Management - hereunder Stances on Private Equity;
- Focus on Pluralism and the Real Economy.
Reference to The Economist's Special Reports on Financial Markets - a. o.:
The Special Report on February 25th, 2012, which defines "Real financial innovation with social impact"
It pointed e.g. to crowd funding and impact bonds in order to stimulate enterprise/innovation and job creation. At the time the existence of a CVN-Approach for Impact Investing was not known by media and markets.
The Special Report May 4th 2019: "Fintech's Raid on Banks", which focuses on borrowing/lending, account management and payments by mobile phones. There was not a wink about all those SMEs without "Names" in media and markets, who are underserved by incumbents of the financial industry - for example when access to equity capital for pro-active restructuring is concerned. However, Chapter 10 of the Special Report refers to a "Flanker Bank-Fintech Initiative" by an incumbent of the financial industry.
A CVN-Approach for Impact Investing can be scaled-up and boosted by Fintech
It can be carried through according to- or aligned with Bankier.co's participation in HBS.edu New Venture Competition 12-2022. It’s future REACH into the Real Economies of Maritime Regions can be enhanced by real financial innovation with social impact*, scrutiny of corporate doctrines on perceived climate changes** and fair play, general and pro-active measures - e.g. by implementation of general Green Pricing***.
*) A. o. applications of Cyber-secure Fintech benefiting all those without "Names" in media and markets - underserved today by the incumbents;
**) Cf. an article by Gillian Tett in FT Weekend “Capitalism – a new Dawn” Sept. 7, 2019 - look to a “Change the World Issue” of Fortune.com 9-2019.
***) Green Pricing implies processes for improvements by stimulating and/or taxing the actual use of resources and technical standards.
Basic Infrastructure Activities (BIAs), such as banks, should operate as to the intent of public licenses and always put customers' needs first
BIAs should be influenced by citizens/users/participants. Regional development of BIAs is much needed by SMEs. However, BIAs are often organizations with a narrow corporate culture, i.e. controlled by somebody with "power of office", which can open up to possible abuse. Cf. the Latin word: "Imperium".
Remedies to avoid negative impacts of a narrow corporate culture are:
Economic co-responsibility/accountability and empowerment resulting in shared interests - as well as a parallel practice of offering a value proposition to the atomist (read: the individual without influence alone). Thereby any organization can express its purpose (French: Raison d'Être).
This is exactly what a trustee/fiduciary of a Social Enterprise for Impact Investing – organized as a CVN - will do when establishing a peer-to-peer relation with an owner/enterpriser or investor of a SME or a BIA – for example to make a relation better prepared to meet the market. Its CVN also consists of an InvestCo for assembling stakeholders, including capital partners, and a Protection Club for those interested in spreading risk and building capacities to facilitate effective impact investing. For more details look below - and to other pages of this website.
Most Incumbents of the Financial Industry are Multi-Role Financial Groups practicing cross-selling strategies
There should be supplementing, single-role alternatives to the transaction-fee driven financial players with cross-selling strategies stimulated by internal bonuses. Massive stimulus directed to the "Banking Monsters" (“too big to fail”) have not been as productive as the “stealth”, continuous efforts a. o. for job creation by "Community Banking" – without any State support and stimulus.
According to FT.com - US “Community Banking” with less than 1 billion USD in Assets account for > 10% of the financial industry’s total assets, but provides 40% of the financial industry’s capital to small businesses. And some of them are already raiding competitors and themselves by fintech - i.e. by combining new and old.
US Federal Deposit Insurance Corporation (FDIC) has an ongoing initiative to support America's “Community Banking", including a project to gather more knowledge about this understudied sector. FDIC has observed that "Community Banks" are central to USA's job creation. Therefore FT.com asserts: "The idea of being Small / Local / Specialist / Boutique is no longer taboo. Community Banks fit the times. They are the banks that politicians can be seen to embrace". In South America, Europe, the Mid-East, Africa and in Asia the financial structures have different standards, reach and qualities – reflecting their nations’ diversity of industries and cultures – as well as their different exposure to influences from other parts of the World.
According to FT.com - representatives of US Authorities do acknowledge lack of information about today's "Community Banking", which contribute more than others to the real economy. This is also true in other Parts of the World.
A sub group of “Community Banking” are “Utility Banks”. They are mutual saving & loans, credit unions and building societies based respectively on deposits and bond issues – to lend against collateral. Needless to say - they deal primarily with CREDIT-/ DEBT INSTRUMENTS.
Another sub group are Single-Role Investment-/Merchant Activities and Social Enterprises for Impact Investing - organized as Collaborative Value Networks (CVNs)
These investment activities can deal with owner-/enterpriser dynamics and viable innovation in Small and Mid-sized Enterprises (SMEs) based on resources-/competencies in the fields of equity-capital financing, ownership-dilemmas and owner-governance. The CVN-approach can reach into the real economies of maritime regions by means of Regional Network Partners (RNPs) exercising the role of trustee/fiduciaries in peer-to-peer relations with owners/enterprisers and investors of Small and Mid-sized Enterprises (SMEs), hereunder family-owned firms, as well as directors of regional basic infrastructure activities. Most SMEs and regional basic infrastructure are not "Names" in media and financial markets. Therefore, they are underserved by transaction-fee driven financial players.
Note: SMEs stand for more than 80% of BNP in developed nations and an even larger share of Job creation. Such initiatives can reposition Investment-/ Merchant Activities and position a CVN-Approach to assemble liable capital from many. Thereby capacities can be built by systematic spreading of risk to facilitate e.g.: Access to intermediate financing and/or EQUITY CAPITAL.
The issue at stake is financial reform
Please browse this Page on the topic – including a Summing Up of Bankier.co's Collaborative Value Network (CVN)-Approach for Impact Investing, which follows below.
SMEs, hereunder family-owned firms, need affordable access to trustees/fiduciaries and other expertise, who act as impartial "Wedges" - always at arm's length to insurers, brokers, banks and fund managers.
SMEs also need “Bridges” between Enterprise and Wealth – for raising capital and spreading risk.
Therefore, Bankier.co’s initiative can contribute to real financial reform; namely:
- A financial structure also for the real economy’s SMEs, hereunder family-owned firms;
- Separation of the roles to achieve impartial, financial value chains;
- Financial innovation - with social impact.
Please evaluate Bankier.co's CVN-Approach for Impact Investing as an innovative- and supplementing alternative to multi-role financial groups and other transaction-fee driven players
A Consortium of Alliances/Catalysts are initial scalers. They choose co-opetition to achieve real financial innovation – benefiting “customers and customers’ customers”.
Parallel recruitment of Regional Network Partners (RNPs) help to organize competent trustees in maritime regions, where needs of owners/enterprisers and investors are similar everywhere.
Both Alliances and RNPs hold negative control (40%) of the vote-rich A-shares in a shared “InvestCo”. In the role of a protector Bankier.co holds the rest (20%).
Underserved Small- and Mid-sized Enterprises (SMEs), hereunder family-owned firms, assemble for access to affordable- and competent trustees. Therefore, they choose to become Self-directed Capital Partners of the CVN-Approach. In the future – the shared “InvestCo” (Restru-Reorg AS/Ltd.) will be majority-owned by the Self-directed Capital Partners - owning vote-weak B-shares to avoid becoming “insiders”.
Note: They have a right, but not an obligation, to become Members of a Protection Club. Each member has an individual master account, which they are free to increase or reduce.
The Stakeholders of the CVN-Approach along with Members of the Protection Club and Impact Bond-holders can assemble, spread risk and build capacities to facilitate effectively a. o. Pro-Active Restructuring & Reorganization (PARR) - and they avoid extreme management fees. The “No-Group-Structure” of the CVN-Approach combines a Role-divided Business Model and an Open Ownership Model. Such a structure can attain a multiplier-effect – making the CVN-Approach a vital Financial Model for Value Creation with reach beyond the financial economy – i.e. into the real economies of maritime regions.
A Postscript on Trust - with a historic-, systemic- and resource-based perspective
Trust can prevail if- and when transparent, deliberative pluralism opens up for Collaborative Value Networks, Impartiality, Transparency, Pro-Active Restructuring - as well as Cyber-security backed by a UN Intl. Court of Cyber Crimes.
2023: In times of pandemics, warfare, supply-side problems, high debt-levels and inflation - fast changing trade- and monetary policies trigger new, unforeseen financial crises - contagious caused by lack of trust;
2021: An era of poor credit extension based on collateral may end in EU/EEA - subject to a debt relief-reform;
2017: Cyber-secure FINTECH can help scale-up Collaborative Value Networks for self-directed participants;
1999: The Repeal of US Glass-Steagall Act - resulted in favoring, collusion and a financial crisis (2008);
1993: The use of Internet grew exponentially by 3G. But, it also resulted in a Dot.com-bubble (2000);
1987: City of London abolished its divide between roles – e.g. acceptance houses and clearing banks;
1700: Northern Europe expanded by use of checks, acceptances and charging interest - based on trust;
1400: The Catholic Church favored the powerful by a ban on charging interest - like other orthodoxies…
RSS Feed