Social Banking and Social Finance: Answers to the Economic Crisis

For over 2,000 years, banks have served to facilitate the exchange of money and to provide a variety of economic and financial services. During the most recent financial collapse and subsequent recession, beginning in 2008, banks have been vilified as perpetrators of the crisis, the public distrust compounded by massive public bailouts. Nevertheless, another form of banking has also emerged, with a focus on promoting economic sustainability, investing in community, providing opportunity for the disadvantaged, and supporting social, environmental, and ethical agendas. Social Banking and Social Finance traces the emergence of the “bank with a conscience” and proposes a new approach to banking in the wake of the economic crisis. Featuring innovations and initiatives in banking from Europe, Canada, and the United States, Roland Benedikter presents an alternative to traditional banking practices that are focused exclusively on profit maximization. He argues that social banking is not about changing the system, but about improving some of its core features by putting into use the "triple bottom line" principle of profit-people-planet. Important lessons can be learned by the success of social banks that may be useful for the greater task of improving the global financial system and avoiding economic crises in the future.



Critical Acclaim for This Publication

 “This volume provides a description of social banking and social finance, their background in the history of ideas and their importance within the current globalized economy. It is not only an excellent didactical introduction, but also an entertaining and at the same time scientifically sound and differentiated explanation, which to my knowledge is so far unparalleled in English-speaking academia. I believe that the insights of this volume can have a progressive impact on the thinking about money and finance of the new generations, as well as the broader public in theUnited States and inEurope. I therefore consider this volume to be one step (among the many necessary) toward a realistic and sober rethinking of capitalism. Even if it is just a brief text and thus a small step, it is an important one. Because, as German philosopher Friedrich Nietzsche said, every long voyage starts with a brief first step. And this step, as compressed, simple and surprising as it may sometimes seem, may prove to be inspiring for those which come afterwards. I think that Benedikter’s volume is a valid response to the profound challenges arisen with the economic and financial crisis of 2007–2010. The solutions and perspectives it proposes are useful tools to help us to avoid further crises.”

-Professor Dr. Hans Christoph Binswanger, Chair Emeritus of National Economics, University St. Gallen, Switzerland, and former director of the Swiss Research Association on National Economics, Zürich 


“The recent crisis has shown that the time for more differentiated and just approaches to money and finance is ripe. I hope that with this outstanding didactical introduction oriented not primarily toward specialists, but to students and teachers, as well as to the broad public, the discussion about how we can move forward in making better use of money and finance will gain further momentum. This volume is an important contribution to broadening the financial literacy of our time.”

-Professor Dr. Udo Reifner, Department for Economics and Social Science, Hamburg University


“This is a clear and intense text. It has the advantage of summoning up some of the most important questions of current economics and finance in a short, easily  understandable and well-structured way. The reader is on the one hand provided insight into the main issues of today’s debate about the future of capitalism. On the other hand, she and he are informed about the ongoing (r)evolution in the banking and finance sector. The present change goes beyond the traditional reductionisms of the mainstream banking and finance sector. It starts to demonstrate how the creation of economic value on the one hand and a sustainable social and environmental development on the other hand can be integrated into one and the same approach. The international educational sector has to be grateful for this volume.”

-Professor Dr. Leonardo Becchetti, Department of Economics, Università Roma II “Tor Vergata, ”Italy 


“One of the first soundly scientific publications of its kind in English, this volume provides a complete overview over the contemporary field of social banking and social finance. Written in a short and easily understandable manner, it explains the history, the philosophy, the current state, and the perspectives of social banking and social finance in theUnited Statesand inEurope. This volume is an indispensable first entry for everybody who wants to know how we can deal with money in a better, sustainable way.” 

-Professor Dr. Ernst Ulrich von Weizsäcker, dean emeritus, Bren School of Environmental Science and Management, University of California at Santa Barbara, former policy director of the United Nations, Centre for Science and Technology for Development New York City, member of the Club of Rome, ordinary commissioner of the World Commission on the Social Dimensions of Globalization  


“Without need of prior knowledge, this volume is the ideal introduction to social banking and social finance for students and teachers. As a result of the economic crisis of 2007–2010, the request for a better handling of money and finance has increased on a global level. Social banking and social finance are answers that while not everybody must agree with them, they are worth to be known by everybody who wants to join the discussion on a well founded basis.”

-Professor Hanns-Fred Rathenow, director of the Institute of Social Sciences and Education in History and Politics, head of the Center for Global Education and International Cooperation, The Technical University of Berlin


“Social banking is a field of civil society engagement that has surfaced to international attention during the most recent financial crisis. This volume is an excellent introduction from a contemporary viewpoint. It departs from outlining the main traits of the economic crisis of 2007–2010, but its insights and teachings are not limited to it. This volume uses the crisis just as a starting point to explain how the financial system can move forward toward a more rational constellation of balance and inclusion. It is as unique as it is valuable.”

-Professor Dr. James Giordano, The Oxford Uehiro Centre for Practical Ethics, Oxford University, director of Academic Programs of The Potomac Institute for Policy Studies Arlington, Virginia


“I appreciate particularly the interdisciplinary and multilayered approach of this volume. It is one of the first English publications that transcends the limits of reducing social banking and social finance to ‘developmental aid’ for the so-called ‘developing world,’ or to simply identify it with approaches like ‘helping the poor’, like it has been done too often in the past. Instead, as this volume shows, social banking and social finance are more: They are about rationally and soberly innovating the system of capitalism, but without revolutionizing it. That is because social banks consider capitalism as a basic social good of modernity, that in the aftermath of the crisis has to be transformed into a ‘better’ capitalism which serves the greater society instead of benefiting just a few. The whole argumentation of this volume is about creating a broader range of options for the average bank customer in theUnited Statesand Europeand to make the use of capital more ‘humane,’ by serving the specific needs of the ‘real economy’ instead of abstract speculation. This volume, although short and concise, gives a quite realistic picture of the situation and its perspectives. The author finds the right balance between simplification, precision, and vision.”

-Professor Dr. Michael Opielka, Department of Social Welfare and Social Politics, The University of Applied Sciences Jena, Germany