Public Banking as an Institutional Design Project

This Article offers a conceptual framework for analyzing public banking as an institutional form of finance. It examines the key elements of design of a public bank as a financial institution―its core functions, sources of funding, asset structure, and governance framework―and highlights the opportunities and challenges presented by various choices along these dimensions. By isolating a series of pivotal decision points, the Article constructs a basic roadmap for designing a public entity capable of delivering the desired set of public benefits. To maximize these benefits on a system-wide level, the Article calls for a new approach to institutional design that would expand policymakers’ focus to the larger project of creating an ecosystem of public interest-oriented finance.