Ethical Banking in Croatia

Adam Simpson: In your own words, how would you define ethical banking? And how does it differentiate from traditional banks?

Goran Jeras: I wouldn't use the word “traditional” because I think that banks started as a very similar institution to what we’re doing, so to some extent back it’s to the roots. Because the banks were not usually founded by rich guys that wanted to control the world. Typically, they were founded by people that didn't have enough money, who wanted to pool their resources in one way or another. There is a definition of an ethical bank that we refer to. An ethical bank needs to have the following characteristics:

  1. It needs to be fully owned by its customers, so there are no shareholders in a bank who don't have also interesting in services the bank is providing.
  2. It needs to be democratically governed, for instance, one member or one principal regardless of the amount of the capital that the member in the bank possesses.
  3. There must be an equal emphasis on the importance balance between financial, social, and environmental goals. All three aspects of an investment of the ethical bank needs to be positive, and finally from our part in that it needs to be local.
  4. The bank needs to keep and maintain an individual relationship with all its clients and customers, which isn’t possible if it becomes a big international institution.
  5. Transparency is also important. The role of the bank is to manage other people’s funds, so those people have every right to exactly know where their money is going and why it is going there, why it is assessed to be a good thing the three abovementioned aspects.

Our model of growth is based on expanding the model to different communities, sharing the costs of infrastructure, establishing common investment and collaboration schemes for areas of mutual interest, but to keep governance independence at the local levels. We think that is very important.

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