Where do banks invest their depositors\u2019 money? Whose interests do they serve, and what criteria do they apply? Increasing numbers of dissatisfied customers want to know what happens to their money, and are opting for alternative financial services which are growing in spite of the economic crisis choking Spain.<\/p>\n
\u201cAs soon as a loan is approved, it is posted on our website,\u201d Ernesto Ju\u00e1rez, a member of the local FIARE group in the southern city of M\u00e1laga, told IPS. Transparency is a core feature of this ethical banking project, presently operating in Spain as an agency of the Italian credit cooperative Banca Popolare \u00c9tica (BPE).<\/p>\n
With 2,618 members and capital equivalent to 3.4 million dollars, FIARE finances organisations with development aid, social inclusion or agroecology projects that have been affected by spending cuts or delays in public or private support, said Ju\u00e1rez, who added that the total value of loans increased by 40 percent between 2010 and 2011.<\/p>\n
\u201cFinancially, we are very stable. We do not lend more than we have,\u201d said Ju\u00e1rez. The organisation provides \u201cresponsible\u201d savings and investment plans, in contrast to the commercial and savings banks that have exacerbated the crisis with their obsession with speculating and maximising profit, he said.<\/p>\n
Between 64 and 77 billion dollars of capital is needed to rescue the Spanish banking sector, rocked by the bursting of the real estate bubble in 2008, two foreign auditing firms commissioned by the government reported Thursday Jun. 21.<\/p>\n
On Jun. 9 the EU approved a credit line of 127 billion dollars for the government of rightwing Prime Minister Mariano Rajoy to bail out the banks; once the actual amount needed is determined, the government must formally request the rescue package and accept its terms.<\/p>\n
Meanwhile, the people of Spain are fed up with the drastic spending cuts in health, education, social protection and public services aimed at reducing the fiscal deficit to the levels insisted on by the EU and paying down the public debt.<\/p>\n
On May 9 the government announced the nationalisation of Bankia, the country\u2019s fourth-largest bank, and the eighth financial institution taken over by the state since the crisis began in 2008. Bankia was the bank most exposed to toxic assets arising from the property market crash.<\/p>\n
Spain is struggling with a 24.3 percent unemployment rate that has resulted in more than five million people out of work, and is suffering the worst cutbacks since democracy was established in 1977.<\/p>\n
\u201cIn the present circumstances, people reflect more about economic and financial matters, and many people opt for ethical banking,\u201d sources at the Triodos Bank, a leading European ethical bank with \u201cgood liquidity, that invests in sustainable sectors of the real economy,\u201d told IPS.<\/p>\n
The Triodos Bank operates in The Netherlands, Belgium, Germany, the United Kingdom and, since September 2004, Spain, where it has over 80,000 customers, 12 offices and 150 employees.<\/p>\n
In 2011, in spite of the credit squeeze in traditional banking due to the financial crisis, the Triodos Bank\u2019s net profits grew by 51 percent and it awarded 33 percent more in loans to organisations working in sectors like agroecology, culture, social inclusion and the elderly.<\/p>\n
\u201cOur customers are people who want to see transparent and responsible investment and who want to know how their money is being used; we also have as members businesses and associations committed to environmental, social and cultural goals,\u201d they said.<\/p>\n
In ethical banking, applications for loans are evaluated differently than in commercial banks. For instance, at FIARE an ethical-social evaluation committee examines prospective investments and loans to ensure that they are compatible with the principles of viability, sustainability, and respect for the environment and labour rights.<\/p>\n
Ju\u00e1rez announced plans for a merger of FIARE with BPE next year, which would transform FIARE into a powerful credit cooperative, offering conventional banking services and products. BPE has 47.7 million euros of social capital, and 36,898 members.<\/p>\n
\u201cThe idea is not to grow at a fast rate, but to take root in the regions,\u201d Ju\u00e1rez said. The important thing is the establishment of the project through consolidation of networks and involvement of social groups and individuals who will contribute to its development in different communities, he said. At present FIARE has 10 associations based in different regions.<\/p>\n
Ethical banking is an alternative for \u201cmany people who are disillusioned with traditional banking,\u201d particularly because of the enormous sums paid in bank bailouts and the astronomical salaries of their executives, said \u00d3scar Garc\u00eda Jurado, the technical secretary of COOP57 Andalusia, which belongs to the COOP57 financial services cooperative.<\/p>\n
Garc\u00eda Jurado told IPS about their campaign on the theme of \u201cPut your money where your ideas are,\u201d and said the cooperative uses its funds to provide resources to organisations carrying out social and economic projects that foment employment, the formation of associations and sustainability.<\/p>\n
\u201cI always found it worrying that a bank could use my savings to invest in companies that were anathema to my principles, such as weapons manufacturers,\u201d Pilar Iglesias, a retired teacher, told IPS.<\/p>\n
Iglesias put her savings into ethical banking so that \u201cthey would finance projects compatible with a sustainable model of human development, with a gender perspective \u2013 the only model that will help build a balanced economy centred on people and their needs.\u201d<\/p>\n
COOP57, a FIARE partner, was founded in 1996 and has 407 participant groups that are social entities, such as cooperatives, social movements and foundations, and 1,707 individual associate members. It finances 170 projects with a total value of 8.7 million dollars and manages deposits worth 13.7 million dollars.<\/p>\n
Apart from the contributions of its participant groups, the cooperative receives resources from its associate members, who are \u201cpeople who want their savings to be managed in accordance with their ethical and social concerns.\u201d In 2012, their deposits are earning two percent annual interest, according to the Coop57 web page.<\/p>\n
Garc\u00eda Jurado acknowledged the major impetus given to ethical banking by the 15M \u201cindignados\u201d or \u201coutraged\u201d movement, which emerged from protests on May 15, 2011 in Spain, which is demanding more participative democracy and a different social and economic model under the slogan \u201cWe are not merchandise in the hands of politicians and bankers.\u201d<\/p>\n