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Bankier.co

On FINANCIAL REFORM

3/15/2023

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Real reform with social impact is much needed - in the wake of pandemics/warfare and resulting crises as well as digitization- and climate-challenges  
Focus on the real economy and institutional changes is mandatory. The large majority of SMEs in the real economy are not “Names” in media and markets. They are underserved by the transaction-fee driven incumbents of today’s financial industry looking for repeat business with the “Names” of financial markets. This fact & problem can only be tackled by fair play financial reform and pro-active measures - for example:
  • Financial Authorities must stop favoring incumbents. Why? It is illegal in developed financial markets;
  • Scaling-Up Social Enterprises for Impact Investing - organized as Collaborative Value Networks (CVNs).
More details on the CVN-Approach for Impact Investing follow below.
Please find a Postscript on Trust - with a historic-, systemic- and resource-oriented perspective.


A New EU-/EEA directive is implemented to promote equity capital- and loan-financed Crowdfunding.
Therefore, initiatives are taking place for the benefit of raising capital to small enterprises, which lack “Names” in media and markets. And that can contribute - indirectly and directly - to a successful scaling-up of Bankier.co's innovative Alternative:
"A Social Enterprise for Impact Investing - organized as a Collaborative Value Network (CVN)".
 
Pro-active change 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.


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”.
Bankier.co’s CVN-Approach can contribute to DeFi with its role-divided “No-Group-Structure” for effective Impact Investing. It is an example of a Social Enterprise with a Decentralized Autonomous Organization (DAO).
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:
  1. National Core Networks for Cyber ​​Security - shared by licensed operators to reduce end users' cost;
  2. Licensed national telecom-operators as well as other operators of basic infrastructure and social media;
  3. Banks and settlement systems;
  4. Insurance- and investment services, hereunder fund management.

​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 the Real Economy and Institutional Changes. 

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 finance, ownership 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. 

As already mentioned above - SMEs need affordable access to trustees/fiduciaries, who act as an impartial "Wedge" - always at arm's length to insurers, brokers, banks and fund managers.
Therefore, Bankier.co can contribute to real financial reform; namely:
  • Financial structure also for SMEs of the real economy, hereunder family-owned firms;
  • Separation of the roles to achieve impartial, financial value chains;
  • Financial innovation; i. e. with social impact. 
Look to the page: "Funds Managements - Stances on Private Equity".
It refers to an article in the Economist on October 22nd 2016, which sheds light on the stealth growth of Private Equity Funds (P-E funds) and the growing riches of their managers. The vitality of the Private Equity has seen it replace investment banking as the most sought after job in finance, according to the Economist. The page asks the reader to take a stance on the P-E funds.

Please evaluate Bankier.co's CVN-Approach for Impact Investing as an alternative
It is co-owned by self-directed capital partners. They have a right, but not an obligation, to become Members of a Protection Club. Each member has an individual master account. Members can assemble, spread risk and build capacities to facilitate effectively a. o. pro-active restructuring - and they avoid extreme management fees. 

A Postscript on Trust - with a historic-, systemic- and resource-based perspecitive
Trust can prevail if- and when transparent, deliberative pluralism open up for Collaborative Value Networks, Impartiality, Transparency, Pro-Active Restructuring - as well as Cyber-security by FINTECH.
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…      
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    Since 1988 has S.T.Evensen worked for real financial reform - in cooperation with Endowment for Ethics & Enterprise -                 supported by:            Bankierhuset Ltd./AS              (captive holding co.)             Invest-Serv Plc/ASA              (for stakeholders)            Restru-Reorg AS / Restru.net     (for pro-active restructuring and reorganization).                   

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