underbanked

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The Unbanking of America: How the New Middle Class Survives by Lisa Servon

Affordable Care Act / Obamacare, Airbnb, basic income, behavioural economics, Build a better mousetrap, business cycle, Cass Sunstein, choice architecture, creative destruction, Credit Default Swap, cross-border payments, do well by doing good, employer provided health coverage, financial exclusion, financial independence, financial innovation, gender pay gap, gentrification, George Akerlof, gig economy, Glass-Steagall Act, income inequality, independent contractor, informal economy, Jane Jacobs, Joseph Schumpeter, late fees, low interest rates, Lyft, M-Pesa, medical bankruptcy, microcredit, Occupy movement, payday loans, peer-to-peer lending, precariat, Ralph Nader, Richard Thaler, Robert Shiller, Ronald Reagan, Savings and loan crisis, sharing economy, subprime mortgage crisis, too big to fail, transaction costs, unbanked and underbanked, underbanked, universal basic income, Unsafe at Any Speed, We are the 99%, white flight, working poor, Zipcar

The Federal Deposit and Insurance Corporation (FDIC) conducts the biannual “National Survey of Unbanked and Underbanked Households.” The survey classifies respondents as “banked” (they use only banks and credit unions), “unbanked” (they have no bank account), or “underbanked” (they have bank accounts but continue to rely on alternative financial services). As of 2013, the year of the FDIC’s most recent survey, approximately 8 percent of Americans were unbanked and another 20 percent were underbanked. The picture looks far worse for people of color. One in five African American households and nearly 18 percent of Latino households are unbanked.

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It’s time to launch a movement that will pressure the public and private sectors to reform the consumer financial-services industry, in a way that makes financial health attainable and sustainable for all Americans. We need an industry that keeps people’s money safe, provides high-quality, affordable products and services, aligns with our democratic values, and truly serves people, in the best sense of that word. Right now we’re all underbanked, but not in the way Washington believes us to be. We’re underbanked because the banks that hold most of our assets do a lousy job of serving us. Mainstream banking especially doesn’t make sense for many people who are financially insecure. To figure out what current banking trends mean for them, I entered the belly of the beast—a small check-cashing store in the South Bronx. 1 Where Everybody Knows Your Name The sky is inky black when my alarm clock gongs at 5:30 a.m.

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It’s not easy to talk about money in our culture, and for some, it meant revisiting painful moments in the past and decisions that they wished they hadn’t made, while thinking about a future that seems bleak. I hope we can all benefit from their courage, sharing, and perseverance. Notes Introduction: We’re All Underbanked xiv the percentage of Americans: Susan Burhouse et al., “2013 National Survey of Unbanked and Underbanked Households” (Washington, DC: FDIC, October 2014). https://www.fdic.gov/householdsurvey/2013report.pdf xv Payday lending grew: Eva Wolkowitz, “2013 Financially Underserved Market Study” (Chicago: Center for Financial Services Inclusion, December 10, 2014). http://www.cfsinnovation.com/content/2012-financially-underserved-market-sizing-study#sthash.1QQKl1ou.dpuf xvi A ChexSystems report that: Jessica Silver-Greenberg, “Over a Million Denied Bank Accounts for Past Errors,” New York Times, July 30, 2013. http://dealbook.nytimes.com/2013/07/30/over-a-million-are-denied-bank-accounts-for-past-errors/?

How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy by Mehrsa Baradaran

access to a mobile phone, affirmative action, Alan Greenspan, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, Bear Stearns, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, cashless society, credit crunch, David Graeber, disintermediation, disruptive innovation, diversification, failed state, fiat currency, financial innovation, financial intermediation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, housing crisis, income inequality, Internet Archive, invisible hand, junk bonds, Kickstarter, low interest rates, M-Pesa, McMansion, Michael Milken, microcredit, mobile money, Money creation, moral hazard, mortgage debt, new economy, Own Your Own Home, Paul Volcker talking about ATMs, payday loans, peer-to-peer lending, price discrimination, profit maximization, profit motive, quantitative easing, race to the bottom, rent-seeking, Ronald Reagan, Ronald Reagan: Tear down this wall, Savings and loan crisis, savings glut, subprime mortgage crisis, the built environment, the payments system, too big to fail, trade route, transaction costs, unbanked and underbanked, underbanked, union organizing, W. E. B. Du Bois, white flight, working poor

Derek Thompson, “When You’re Poor, Money is Expensive,” Atlantic, July 14, 2014, accessed March 17, 2015, m.theatlantic.com/business/archive/2014/07/its-expensive-to-be-poor-money/374361/. 8. Barr, No Slack, 120. 9. FDIC, “2013 FDIC National Survey of Unbanked and Underbanked Households,” October 2014, accessed March 17, 2015, www.fdic.gov/householdsurvey/2013report.pdf; University Neighborhood Housing Program, “Banking in the Bronx: Assessing Options in a Historically Redlined and Underbanked Borough,” April 2012, accessed March 17, 2015, www.unhp.org/pdf/BankingInTheBronx.pdf. 10. “In fact, the ABA says, the annual cost of a checking account is actually $250 to $300.” The American Bankers Association (ABA) claims that the cost of opening an account runs between $150 and $200, and the annual cost of maintaining an account runs between $250 and $300.

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Danielle Douglas-Gabriel, “How Wal-Mart and Google Could Steal Young Customers from Traditional Banks,” Washington Post, May 27, 2014, accessed March 15, 2015, www.washingtonpost.com/blogs/wonkblog/wp/2014/05/27/how-wal-mart-and-google-could-steal-young-customers-from-traditional-banks/. 77. “Why Does Kenya Lead the World in Mobile Money?,” Economist, May 27, 2013, accessed March 15, 2015, www.economist.com/blogs/economist-explains/2013/05/economist-explains-18. 78. “[Sixty-nine] percent of the unbanked … [and] 88 percent of the underbanked have access to a mobile phone … 39 percent of underbanked consumers have used mobile banking in the past 12 months.” Federal Reserve Board of Governors, “Consumers and Mobile Financial Services 2014,” March 2014: 2, accessed March 15, 2015, www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201403.pdf. 79.

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Approximately 70 million Americans do not have a bank account or access to traditional financial services. That is more people than live in California, New York, and Maryland combined. It is more than the total number of people who voted for Barack Obama (or Mitt Romney) in the 2012 election.7 The term “unbanked” or “underbanked” describes a group of people who rely on fringe lenders, but these terms underestimate the problem. An even larger and less quantifiable number of people do have bank accounts but rely primarily on alternative banking services for a variety of reasons.8 In fact, recall that you must have a bank account in order to use a payday lender.

Blockchain: Blueprint for a New Economy by Melanie Swan

23andMe, Airbnb, altcoin, Amazon Web Services, asset allocation, banking crisis, basic income, bioinformatics, bitcoin, blockchain, capital controls, cellular automata, central bank independence, clean water, cloud computing, collaborative editing, Conway's Game of Life, crowdsourcing, cryptocurrency, data science, digital divide, disintermediation, Dogecoin, Edward Snowden, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, financial innovation, Firefox, friendly AI, Hernando de Soto, information security, intangible asset, Internet Archive, Internet of things, Khan Academy, Kickstarter, Large Hadron Collider, lifelogging, litecoin, Lyft, M-Pesa, microbiome, Neal Stephenson, Network effects, new economy, operational security, peer-to-peer, peer-to-peer lending, peer-to-peer model, personalized medicine, post scarcity, power law, prediction markets, QR code, ride hailing / ride sharing, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, SETI@home, sharing economy, Skype, smart cities, smart contracts, smart grid, Snow Crash, software as a service, synthetic biology, technological singularity, the long tail, Turing complete, uber lyft, unbanked and underbanked, underbanked, Vitalik Buterin, Wayback Machine, web application, WikiLeaks

For example, the Islamic Bank of Bitcoin is investigating ways to conduct Sharia-compliant banking with Bitcoin.92 A key point of Bitcoin neutrality is that the real target market for whom Bitcoin could be most useful is the “unbanked,” individuals who do not have access to traditional banking services for any number of reasons, estimated at 53 percent of the worldwide population.93 Even in the United States, 7.7 percent of households are forecast to be unbanked or underbanked.94 Bitcoin neutrality means access for the unbanked and underbanked, which requires Bitcoin solutions that apply in all low-tech environments, with features like SMS payment, paper wallets, and batched blockchain transactions. Having neutrality-oriented, easy-to-use solutions (the “Twitter of emerging market Bitcoin”) for Bitcoin could trigger extremely fast uptake in underbanked markets, continuing the trend of 31 percent of Kenya’s GDP being spent through mobile phones.95 There are different SMS Bitcoin wallets and delivery mechanisms (like 37Coins96 and Coinapult, and projects like Kipochi97 that are integrated with commonly used emerging-markets mobile finance platforms like M-Pesa.

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v=BT8FXQN-9-A. 92 Senbonzakura (handle name). “Islamic Bank of Bitcoin.” Bitcoin Forum, June 24, 2011. https://bitcointalk.org/index.php?topic=21732.0. 93 Chaia, A. et al. “Half the World Is Unbanked.” McKinsey & Co, March 2009. http://mckinseyonsociety.com/half-the-world-is-unbanked/. 94 “2013 FDIC National Survey of Unbanked and Underbanked Households,” U.S. Federal Deposit Insurance Corporation, updated October 28, 2014, https://www.fdic.gov/householdsurvey/. 95 Mims, C. “M-Pesa: 31% of Kenya’s GDP Is Spent Through Mobile Phones.” Quartz, February 27, 2013. http://qz.com/57504/31-of-kenyas-gdp-is-spent-through-mobile-phones/. 96 Cawrey, D. “37Coins Plans Worldwide Bitcoin Access with SMS-Based Wallet.”

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and Features double-spend problem, The Double-Spend and Byzantine Generals’ Computing Problems fiat currency, Relation to Fiat Currency-Relation to Fiat Currency monetary and nonmonetary, Currency Multiplicity: Monetary and Nonmonetary Currencies-Currency Multiplicity: Monetary and Nonmonetary Currencies new meanings, Currency: New Meanings technology stack, Technology Stack: Blockchain, Protocol, Currency-Technology Stack: Blockchain, Protocol, Currency currency mulitplicity, Currency Multiplicity: Monetary and Nonmonetary Currencies-Currency Multiplicity: Monetary and Nonmonetary Currencies D DAOs, DAOs and DACs-DAOs and DACs DAOs/DACs, DAOs and DACs-DAOs and DACs, Batched Notary Chains as a Class of Blockchain Infrastructure, Blockchain Government Dapps, Dapps-Dapps, Extensibility of Demurrage Concept and Features Dark Coin, eWallet Services and Personal Cryptosecurity dark pools, Technical Challenges Dark Wallet, eWallet Services and Personal Cryptosecurity DASs, DASs and 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health research commons , Blockchain Health Research Commons health spending, Healthcoin healthcare decision making and advocacy, Liquid Democracy and Random-Sample Elections personal health record storage, EMRs on the Blockchain: Personal Health Record Storage virus bank and seed vault backup, Virus Bank, Seed Vault Backup Healthcoin, Healthcoin, Demurrage Currencies: Potentially Incitory and Redistributable I identity authentication, eWallet Services and Personal Cryptosecurity, Blockchain 2.0: Contracts, Smart Property, Smart Property, Wallet Development Projects, Digital Identity Verification-Digital Divide of Bitcoin, Limitations, Decentralized Governance Services, Liquid Democracy and Random-Sample Elections, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy, Privacy Challenges for Personal Records Indiegogo, Crowdfunding, Dapps industry scandals, Scandals and Public Perception infrastructure needs and issues, Technical Challenges inheritance gifts, Smart Contracts intellectual property, Monegraph: Online Graphics Protection (see also digital art) Internet administration, Distributed Censorship-Resistant Organizational Models Internet Archive, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation, Personal Thinking Blockchains Internet censorship prevention (see Decentralized DNS system) Intuit Quickbooks, Merchant Acceptance of Bitcoin IP protection, Hashing Plus Timestamping IPFS project, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation J Johnston, David, Blockchain Technology Could Be Used in the Administration of All Quanta Journalcoin, Blockchain Academic Publishing: Journalcoin Judobaby, Crowdfunding justice applications for censorship-resistant organizational models, Distributed Censorship-Resistant Organizational Models-Distributed Censorship-Resistant Organizational Models digital art, Digital Art: Blockchain Attestation Services (Notary, Intellectual Property Protection)-Personal Thinking Blockchains (see also digital art, blockchain attestation services) digital identity verification, Blockchain 2.0: Contracts, Smart Property, Wallet Development Projects, Digital Identity Verification-Digital Divide of Bitcoin, Limitations, Decentralized Governance Services, Liquid Democracy and Random-Sample Elections, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy, Privacy Challenges for Personal Records freedom of speech/anti-censorship, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel governance, Blockchain Government-Societal Maturity Impact of Blockchain Governance (see also governance) Namecoin, Namecoin: Decentralized Domain Name System-Decentralized DNS Functionality Beyond Free Speech: Digital Identity, Monegraph: Online Graphics Protection (see also decentralized DNS) K Kickstarter, Crowdfunding, Community Supercomputing Kipochi, Blockchain Neutrality, Global Public Health: Bitcoin for Contagious Disease Relief, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy Koinify, Crowdfunding, Dapps Kraken, Financial Services L latency, Blockchain 2.0 Protocol Projects, Technical Challenges, Technical Challenges, Scandals and Public Perception LaZooz, Dapps, Campuscoin, Extensibility of Demurrage Concept and Features Learncoin, Learncoin learning and literacy, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy-Learning Contract Exchanges learning contract exchanges, Learning Contract Exchanges Ledra Capital, Blockchain 2.0: Contracts, Ledra Capital Mega Master Blockchain List legal implications crowdfunding, Crowdfunding smart contracts, Smart Contracts lending, trustless, Smart Property Lighthouse, Crowdfunding limitations, Limitations-Overall: Decentralization Trends Likely to Persist business model challenges, Business Model Challenges government regulation, Government Regulation-Government Regulation personal records privacy challenges, Privacy Challenges for Personal Records scandals and public 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Currencies: Potentially Incitory and Redistributable N Nakamoto, Satoshi, Blockchain 2.0: Contracts, Blockchain 2.0: Contracts Namecoin, Namecoin: Decentralized Domain Name System-Decentralized DNS Functionality Beyond Free Speech: Digital Identity, Monegraph: Online Graphics Protection Nationcoin, Coin Drops as a Strategy for Public Adoption, Demurrage Currencies: Potentially Incitory and Redistributable notary chains, Batched Notary Chains as a Class of Blockchain Infrastructure notary services, Hashing Plus Timestamping, Blockchain Health Notary NSA surveillance, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel NXT, Technology Stack: Blockchain, Protocol, Currency, Blockchain 2.0 Protocol Projects O offline wallets, Technical Challenges OneName, Digital Identity Verification-Digital Identity Verification OneWallet, Wallet Development Projects online graphics protection, Monegraph: Online Graphics Protection-Monegraph: Online Graphics Protection Open Assets, 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Ripple Labs, Financial Services Roadcoin, Blockchain Government S Saldo.mx, Blockchain Neutrality scandals, Scandals and Public Perception science, Blockchain Science: Gridcoin, Foldingcoin-Charity Donations and the Blockchain—Sean’s Outpost community supercomputing, Community Supercomputing global public health, Global Public Health: Bitcoin for Contagious Disease Relief Sean's Outpost, Charity Donations and the Blockchain—Sean’s Outpost secret messaging, Ethereum: Turing-Complete Virtual Machine security issues, Technical Challenges self-bootstrapped organizations, DASs and Self-Bootstrapped Organizations self-directing assets, Automatic Markets and Tradenets self-enforced code, Smart Property self-sufficiency, Smart Contracts SETI@home, Blockchain Science: Gridcoin, Foldingcoin, Community Supercomputing size and bandwidth, Technical Challenges smart contracts, Smart Contracts-Smart Contracts, Smart Contract Advocates on Behalf of Digital Intelligence automatic markets and tradenets, Automatic Markets and Tradenets Counterparty, Counterparty Re-creates Ethereum’s Smart Contract Platform DAOs/DACs, DAOs and DACs-DAOs and DACs Dapps, Dapps-Dapps DASs, DASs and Self-Bootstrapped Organizations Ethereum, Ethereum: Turing-Complete Virtual Machine increasingly autonomous, Dapps, DAOs, DACs, and DASs: Increasingly Autonomous Smart Contracts-Automatic Markets and Tradenets smart literacy contracts, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy-Learning Contract Exchanges smart property, Smart Property-Smart Property, Monegraph: Online Graphics Protection smartwatch, Extensibility of Demurrage Concept and Features Snowden, Edward, Distributed Censorship-Resistant Organizational Models social contracts, Smart Contracts social network currencies, Currency Multiplicity: Monetary and Nonmonetary Currencies Stellar, Blockchain Development Platforms and APIs stock market, Financial Services Storj, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation, Dapps, Technical Challenges Stripe, Blockchain Development Platforms and APIs supercomputing, Community Supercomputing Svalbard Global Seed Vault, Virus Bank, Seed Vault Backup Swancoin, Smart Property swaps exchange, Financial Services Swarm, Crowdfunding, Dapps Swarm (Ethereum), Ethereum: Turing-Complete Virtual Machine Swarmops, Crowdfunding T Tatianacoin, Communitycoin: Hayek’s Private Currencies Vie for Attention technical challenges, Technical Challenges-Technical Challenges Tendermint, Technical Challenges Tera Exchange, Financial Services terminology, Terminology and Concepts-Terminology and Concepts 37Coins, Global Public Health: Bitcoin for Contagious Disease Relief throughput, Technical Challenges timestamping, Hashing Plus Timestamping-Limitations titling, Decentralized Governance Services tradenets, Automatic Markets and Tradenets transaction fees, Summary: Blockchain 1.0 in Practical Use Tribecoin, Coin Drops as a Strategy for Public Adoption trustless lending, Smart Property Truthcoin, Futarchy: Two-Step Democracy with Voting + Prediction Markets Turing completeness, Ethereum: Turing-Complete Virtual Machine Twister, Dapps Twitter, Monegraph: Online Graphics Protection U Uber, Government Regulation unbanked/underbanked markets, Blockchain Neutrality usability issues, Technical Challenges V value chain composition, How a Cryptocurrency Works versioning issues, Technical Challenges Virtual Notary, Virtual Notary, Bitnotar, and Chronobit voting and prediction, Futarchy: Two-Step Democracy with Voting + Prediction Markets-Futarchy: Two-Step Democracy with Voting + Prediction Markets W wallet APIs, Blockchain Development Platforms and APIs wallet companies, Wallet Development Projects wallet software, How a Cryptocurrency Works wasted resources, Technical Challenges Wayback Machine, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation Wedbush Securities, Financial Services Whatevercoin, Terminology and Concepts WikiLeaks, Distributed Censorship-Resistant Organizational Models Wikinomics, Community Supercomputing World Citizen project, Decentralized Governance Services X Xapo, eWallet Services and Personal Cryptosecurity Z Zennet Supercomputer, Community Supercomputing Zooko's Triangle, Decentralized DNS Functionality Beyond Free Speech: Digital Identity About the Author Melanie Swan is the Founder of the Institute for Blockchain Studies and a Contemporary Philosophy MA candidate at Kingston University London and Université Paris VIII.

No Slack: The Financial Lives of Low-Income Americans by Michael S. Barr

active measures, asset allocation, Bayesian statistics, behavioural economics, business cycle, Cass Sunstein, cognitive load, conceptual framework, Daniel Kahneman / Amos Tversky, financial exclusion, financial innovation, Home mortgage interest deduction, income inequality, information asymmetry, it's over 9,000, labor-force participation, late fees, London Interbank Offered Rate, loss aversion, low interest rates, machine readable, market friction, mental accounting, Milgram experiment, mobile money, money market fund, mortgage debt, mortgage tax deduction, New Urbanism, p-value, payday loans, race to the bottom, regulatory arbitrage, Richard Thaler, risk tolerance, Robert Shiller, search costs, subprime mortgage crisis, the payments system, transaction costs, unbanked and underbanked, underbanked

Many low- and moderate-income families with bank accounts regularly rely on high-cost nonbank providers to conduct much of their financial business—such as cashing checks, buying money orders, or taking out payday loans (Barr 2009; Rhine and others 2001). Recent literature sometimes refers to these households 12864-01_CH01_2ndPgs.indd 3 3/23/12 11:54 AM 4 michael s. barr as “underbanked,” although that of course assumes the outcome of the empirical analysis is that these households need more banking. The high costs of alternative financial services raise several concerns. First, the costs of these basic financial transactions reduce take-home pay (Bachelder and Ditzion 2000; Kennickell, Starr-McCluer, and Surette 2000).

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Farley, Reynolds, Sheldon Danziger, and Harry J. Holzer. 2000. Detroit Divided. New York: Russell Sage Foundation. Fay, Scott, Erik Hurst, and Michelle J. White. 2002. “The Household Bankruptcy Decision.” American Economic Review 92:706–18. FDIC (Federal Deposit Insurance Corporation). 2009. FDIC National Survey of Unbanked and Underbanked Households (www.fdic.gov/householdsurvey/full_report.pdf). FRS (Federal Reserve System). 2010. The 2010 Federal Reserve Payments Study (www. frbservices.org/files/communications/pdf/press/2010_payments_study.pdf). FRTIB (Federal Retirement Thrift Investment Board). 2007. Thrift Savings Plan Participant Survey Results, 2006–07 (www.frtib.gov/pdf/FOIA/2006-TSP-Survey-Results.pdf).

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Pawnshops, check cashers, rent-to-own stores, tax-refund lenders, and other AFS providers are often the dominant means for LMI households to access financial services in their neighborhoods, but such services come at a high cost and leave these households with little opportunity to save. Many more low- and moderate-income families who have bank accounts also rely on high-cost AFS providers to conduct much of their financial business— such as cashing checks, buying money orders, paying bills, or taking out payday loans. One might think of these families as “underbanked,” in the sense that formal financial institutions are not offering them the products and services they need in their daily lives, even though they have bank accounts. Such families use a mix of mainstream and alternative providers. Far too little attention has been paid to the ways in which even banked LMI households are ill served by the financial system.

Bank 3.0: Why Banking Is No Longer Somewhere You Go but Something You Do by Brett King

3D printing, Abraham Maslow, additive manufacturing, Airbus A320, Albert Einstein, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, Apollo 11, Apollo 13, Apollo Guidance Computer, asset-backed security, augmented reality, barriers to entry, behavioural economics, bitcoin, bounce rate, business intelligence, business process, business process outsourcing, call centre, capital controls, citizen journalism, Clayton Christensen, cloud computing, credit crunch, crowdsourcing, disintermediation, en.wikipedia.org, fixed income, George Gilder, Google Glasses, high net worth, I think there is a world market for maybe five computers, Infrastructure as a Service, invention of the printing press, Jeff Bezos, jimmy wales, Kickstarter, London Interbank Offered Rate, low interest rates, M-Pesa, Mark Zuckerberg, mass affluent, Metcalfe’s law, microcredit, mobile money, more computing power than Apollo, Northern Rock, Occupy movement, operational security, optical character recognition, peer-to-peer, performance metric, Pingit, platform as a service, QR code, QWERTY keyboard, Ray Kurzweil, recommendation engine, RFID, risk tolerance, Robert Metcalfe, self-driving car, Skype, speech recognition, stem cell, telepresence, the long tail, Tim Cook: Apple, transaction costs, underbanked, US Airways Flight 1549, web application, world market for maybe five computers

As an industry, this business has grown from $2.7 billion in 2005 to $202 billion in 2012. In November 2011, the Center for Financial Services Innovation (CFSI) released new data about the 2010 underbanked market. The research found that: Underbanked consumers in the US generated approximately $45 billion in fee and interest revenue for financial services providers in 2010. The total dollar volume of the underbanked marketplace in 2010 was approximately $455 billion in principal borrowed, dollars transacted, and deposits held. The market has shown strong growth in certain segments: payment services grew by six per cent from 2009 to 2010; credit services grew by two per cent in the same period.

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(NYSE: NMX) 40 Hong Kong Securities and Futures Commission 41 UBS Wealth Management division now has mortgage approvals for clients down to minutes, and they’re seeking instant approval capability in the near term 42 Estimates range from close to 30 million (8 million unbanked and 18 million underbanked) from census and FDIC data (http://www.fdic.gov/householdsurvey/), to estimates from the Financial Times and Lexis Nexis which put the numbers closer to 70 million (http://insights.lexisnexis.com/creditrisk/2012/04/16/the-population-dynamics-and-credit-quality-of-the-underbanked-market/)) 43 Wall Street Journal, 17 January, 2012, “Starbucks Sees New Growth on the Card”—http://online.wsj.com/article/SB10001424052970203735304577165001653083914.html 44 Starbucks Chapter 2 The ROI of Great Customer Experience As we’ve already identified, we’re seeing a sea-change shift in banking behaviour.

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The first is simply changing behaviour with respect to where and how the consumer shops for financial service products. The second is the proliferation of alternatives to traditional financial service organisations. There’s a growing group of consumers in the United States who have no checking/current or savings account, and they number in the tens of millions.42 This group of unbanked or underbanked is increasing in size instead of decreasing, as conventional wisdom would dictate. Ron Shevlin from Aité Research Group aptly coined the word “de-banked” to describe the behaviour of this growing group of hyperconnected consumers who are abandoning traditional banking relationships. So how can they survive without a bank account?

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World by Don Tapscott, Alex Tapscott

"World Economic Forum" Davos, Airbnb, altcoin, Alvin Toffler, asset-backed security, autonomous vehicles, barriers to entry, behavioural economics, bitcoin, Bitcoin Ponzi scheme, blockchain, Blythe Masters, Bretton Woods, business logic, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon footprint, clean water, cloud computing, cognitive dissonance, commoditize, commons-based peer production, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crowdsourcing, cryptocurrency, currency risk, decentralized internet, digital capitalism, disintermediation, disruptive innovation, distributed ledger, do well by doing good, Donald Trump, double entry bookkeeping, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, failed state, fiat currency, financial innovation, Firefox, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, Future Shock, Galaxy Zoo, general purpose technology, George Gilder, glass ceiling, Google bus, GPS: selective availability, Hacker News, Hernando de Soto, Higgs boson, holacracy, income inequality, independent contractor, informal economy, information asymmetry, information security, intangible asset, interest rate swap, Internet of things, Jeff Bezos, jimmy wales, Kickstarter, knowledge worker, Kodak vs Instagram, Lean Startup, litecoin, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, means of production, microcredit, mobile money, money market fund, Neal Stephenson, Network effects, new economy, Oculus Rift, off grid, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, performance metric, Peter Thiel, planetary scale, Ponzi scheme, prediction markets, price mechanism, Productivity paradox, QR code, quantitative easing, radical decentralization, ransomware, Ray Kurzweil, renewable energy credits, rent-seeking, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Salesforce, Satoshi Nakamoto, search costs, Second Machine Age, seigniorage, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, smart grid, Snow Crash, social graph, social intelligence, social software, standardized shipping container, Stephen Hawking, Steve Jobs, Steve Wozniak, Stewart Brand, supply-chain management, systems thinking, TaskRabbit, TED Talk, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, The Soul of a New Machine, The Wisdom of Crowds, transaction costs, Turing complete, Turing test, Tyler Cowen, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, unorthodox policies, vertical integration, Vitalik Buterin, wealth creators, X Prize, Y2K, Yochai Benkler, Zipcar

Trading is the buying and selling of assets and financial instruments for the purpose of investing, speculating, hedging, and arbitraging and includes the posttrade life cycle of clearing, settling, and storing value. Blockchain cuts settlement times on all transactions from days and weeks to minutes and seconds. This speed and efficiency creates opportunities for unbanked and underbanked people to participate in wealth creation. 6. Funding and Investing: Investing in an asset, company, or new enterprise gives an individual the opportunity to earn a return, in the form of capital appreciation, dividends, interest, rents, or some combination. The industry makes markets: matching investors with entrepreneurs and business owners at every stage of growth—from angels to IPOs and beyond.

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Exchanging Value—speculating, hedging, and arbitraging. Matching orders, clearing trades, collateral management and valuation, settlement and custody Blockchain takes settlement times on all transactions from days and weeks to minutes and seconds. This speed and efficiency also creates opportunities for unbanked and underbanked to participate in wealth creation Investment, wholesale banking, foreign exchange traders, hedge funds, pension funds, retail brokerage, clearinghouses, stock, futures, commodities exchanges; commodities brokerages, central banks, regulators 6. Funding and Investing in an Asset, Company, Start-up—capital appreciation, dividends, interest, rents, or some combination New models for peer-to-peer financing, recording of corporate actions such as dividends paid automatically through smart contracts.

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They can share these digital IDs granularly—that is, share only very specific information about their identity—to facilitate more interactions that will likely lead to their own personal economic growth and prosperity. David Birch, a cryptographer and blockchain theorist, summed it up: “Identity is the new money.”25 Consider the possibilities: the underbanked of the world can enfranchise themselves as they interact with microlending outfits. Potential vendors or lenders can track their usage and repayment of tiny loans, previously unfeasible, on the blockchain rather than rely on some credit score. “Once a previously unbanked person pays back a microloan, they are on their way to securing more and larger loans to build their businesses,”26 said Lubin.

Shortchanged: Life and Debt in the Fringe Economy by Howard Karger

Alan Greenspan, big-box store, blue-collar work, book value, corporate social responsibility, credit crunch, delayed gratification, financial deregulation, fixed income, illegal immigration, independent contractor, labor-force participation, late fees, London Interbank Offered Rate, low interest rates, low skilled workers, microcredit, mortgage debt, negative equity, New Journalism, New Urbanism, offshore financial centre, payday loans, predatory finance, race to the bottom, Silicon Valley, Telecommunications Act of 1996, telemarketer, underbanked, working poor

Because the unbanked have no formal ties to mainstream financial institutions, they can’t secure traditional credit, so they turn to the fringe sector for check cashing, bill paying, short-term payroll loans, furniture and appliance rentals, and a host of other financial services involving high fees and interest rates. When the unbanked are combined with the similarly large number of people who are classified as “underbanked”—those who don’t utilize or qualify for bank services beyond maintaining an account—the market for fringe services is even larger. According to the U.S. General Accounting Office, as many as 56 million adult Americans—about 28% of all adults—don’t have a bank account. Almost 12 million U.S. households (one-fourth of all low-income families) have no relationship with a bank, savings institution, credit union, or other mainstream financial-services provider.2 Most of the unbanked say they lack a checking account because (1) they don’t write enough checks to warrant one, (2) they don’t have any month-to-month savings to deposit, (3) they can’t afford high bank fees, (4) they can’t meet minimum bank balance requirements, (5) they want to keep their financial records private, and (6) they are uncomfortable dealing with banks.

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Additionally, if legitimate consumer credit counseling agencies received government funding for consumer education, it would help wean them from their dependence on the Fair Share contributions of the credit card industry. THE NEED FOR MAINSTREAM BANKS TO SERVE THE POOR Mainstream financial institutions have several important reasons for reaching underbanked and unbanked populations. For instance, banks that develop relationships with low-income consumers by providing even rudimentary services could soon foster new full-service customers. Maintaining bank branches in poor areas, even if they weren’t as profitable as those in higher-income ones, would facilitate better community relations and improve the banks’ ratings under the Community Reinvestment Act (CRA).10 Transitioning into the financial mainstream would help low-income and credit-challenged consumers avoid carrying large amounts of cash (check-cashing outlets are notorious magnets for muggers and street predators) and would be likely to reduce their overall costs for financial transactions.

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Maintaining bank branches in poor areas, even if they weren’t as profitable as those in higher-income ones, would facilitate better community relations and improve the banks’ ratings under the Community Reinvestment Act (CRA).10 Transitioning into the financial mainstream would help low-income and credit-challenged consumers avoid carrying large amounts of cash (check-cashing outlets are notorious magnets for muggers and street predators) and would be likely to reduce their overall costs for financial transactions. Joining the economic mainstream would also help low-income households build savings and improve their credit scores, thereby lowering their costs for financial services and gaining them access to lower-cost sources of credit. To help underbanked and unbanked households to make this transition, banks must develop low-cost and innovative financial products and services. For example, in low-income neighborhoods banks can open small branches that have flexible hours, including nights and weekends. (One of the attractions of the fringe economy is convenience: most check cashers and payday lenders are open on weekends and often late into the night.

The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance by Eswar S. Prasad

access to a mobile phone, Adam Neumann (WeWork), Airbnb, algorithmic trading, altcoin, bank run, barriers to entry, Bear Stearns, Ben Bernanke: helicopter money, Bernie Madoff, Big Tech, bitcoin, Bitcoin Ponzi scheme, Bletchley Park, blockchain, Bretton Woods, business intelligence, buy and hold, capital controls, carbon footprint, cashless society, central bank independence, cloud computing, coronavirus, COVID-19, Credit Default Swap, cross-border payments, cryptocurrency, deglobalization, democratizing finance, disintermediation, distributed ledger, diversified portfolio, Dogecoin, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, eurozone crisis, fault tolerance, fiat currency, financial engineering, financial independence, financial innovation, financial intermediation, Flash crash, floating exchange rates, full employment, gamification, gig economy, Glass-Steagall Act, global reserve currency, index fund, inflation targeting, informal economy, information asymmetry, initial coin offering, Internet Archive, Jeff Bezos, Kenneth Rogoff, Kickstarter, light touch regulation, liquidity trap, litecoin, lockdown, loose coupling, low interest rates, Lyft, M-Pesa, machine readable, Mark Zuckerberg, Masayoshi Son, mobile money, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Network effects, new economy, offshore financial centre, open economy, opioid epidemic / opioid crisis, PalmPilot, passive investing, payday loans, peer-to-peer, peer-to-peer lending, Peter Thiel, Ponzi scheme, price anchoring, profit motive, QR code, quantitative easing, quantum cryptography, RAND corporation, random walk, Real Time Gross Settlement, regulatory arbitrage, rent-seeking, reserve currency, ride hailing / ride sharing, risk tolerance, risk/return, Robinhood: mobile stock trading app, robo advisor, Ross Ulbricht, Salesforce, Satoshi Nakamoto, seigniorage, Sheryl Sandberg, Silicon Valley, Silicon Valley startup, smart contracts, SoftBank, special drawing rights, the payments system, too big to fail, transaction costs, uber lyft, unbanked and underbanked, underbanked, Vision Fund, Vitalik Buterin, Wayback Machine, WeWork, wikimedia commons, Y Combinator, zero-sum game

An additional 18.7 percent of US households (24.2 million households composed of about 49 million adults) were underbanked in 2017. The latter term refers to households that had, in the previous twelve months, used an “alternative financial services provider” for one of these products or services: money orders, check cashing, international remittances, payday loans, refund anticipation loans, rent-to-own services, pawnshop loans, or auto title loans. FDIC statistics on financial inclusion in the United States are available at Federal Deposit Insurance Corporation, FDIC National Survey of Unbanked and Underbanked Households, October 2018, https://economicinclusion.gov/downloads/2017_FDIC_Unbanked_Underbanked_HH_Survey_ExecSumm.pdf.

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FDIC statistics on financial inclusion in the United States are available at Federal Deposit Insurance Corporation, FDIC National Survey of Unbanked and Underbanked Households, October 2018, https://economicinclusion.gov/downloads/2017_FDIC_Unbanked_Underbanked_HH_Survey_ExecSumm.pdf. The survey found that proportions of the unbanked and underbanked were higher among lower-income households, less educated households, younger households, Black and Hispanic households, working-age disabled households, and households with volatile income. The New York City Council took the legislative action on January 23, 2020. For details, see https://legistar.council.nyc.gov/Calendar.aspx. See also Ed Shanahan and Jeffery C. Mays, “New York City Stores Must Accept Cash, Council Says,” New York Times, January 24, 2020, https://www.nytimes.com/2020/01/23/nyregion/nyc-cashless-ban.html.

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This is important because default risk is a significant concern; in a sample of 1.3 million loans approved on the platform, approximately 20 percent defaulted between 2007 and 2018. The company generates revenue from transaction fees (which range from 0 to 6 percent of the initial principal). It has also partnered with traditional banks, on whose behalf it originates loans and collects fees in the process. LendingClub has managed to penetrate many areas that are underbanked as a result of having a small number of banks and bank branches, perhaps because of low population density. It was also the first peer-to-peer lender to register its offering of a “pool of unsecured personal whole loans” as securities with the US Securities and Exchange Commission (SEC). Platforms such as LendingClub have had a sizable impact on one segment of the household credit market.

Frugal Innovation: How to Do Better With Less by Jaideep Prabhu Navi Radjou

3D printing, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, Albert Einstein, barriers to entry, Baxter: Rethink Robotics, behavioural economics, benefit corporation, Bretton Woods, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, circular economy, cloud computing, collaborative consumption, collaborative economy, Computer Numeric Control, connected car, corporate social responsibility, creative destruction, crowdsourcing, disruptive innovation, driverless car, Elon Musk, fail fast, financial exclusion, financial innovation, gamification, global supply chain, IKEA effect, income inequality, industrial robot, intangible asset, Internet of things, job satisfaction, Khan Academy, Kickstarter, late fees, Lean Startup, low cost airline, M-Pesa, Mahatma Gandhi, Marc Benioff, megacity, minimum viable product, more computing power than Apollo, new economy, payday loans, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, planned obsolescence, precision agriculture, race to the bottom, reshoring, risk tolerance, Ronald Coase, Salesforce, scientific management, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, six sigma, smart grid, smart meter, software as a service, standardized shipping container, Steve Jobs, supply-chain management, tacit knowledge, TaskRabbit, TED Talk, The Fortune at the Bottom of the Pyramid, the long tail, The Nature of the Firm, Tony Fadell, transaction costs, Travis Kalanick, unbanked and underbanked, underbanked, value engineering, vertical integration, women in the workforce, work culture , X Prize, yield management, Zipcar

For instance, according to the Federal Deposit Insurance Corporation (FDIC), over 68 million Americans – nearly one-quarter of the US population – have little, if any, access to financial services. Traditional financial institutions are not adequately meeting their unique needs. Yet, according to the Center for Financial Services Innovation (CFSI), underbanked Americans collectively earn around $1 trillion in annual income and represent an untapped market worth nearly $90 billion. With frugal products, they could be reached. As Vianney Mulliez, CEO of Auchan, a French international retail group, puts it:9 “There are many ‘emerging markets’ within Western economies that we are eager to serve.”

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Or take Plastyc, a start-up that claims to put the “power of a bank in your cell phone” by providing affordable 24-hour access to FDIC-insured virtual bank accounts that can be accessed from any internet-enabled computer or mobile device. These accounts are tied to prepaid Visa cards; consumers cannot go overdrawn and they incur no late fees. Plastyc’s low-fee, no-frills, online banking services are appealing to the nearly 70 million underbanked, or unbanked, Americans who cannot afford to pay large bank fees. And in the sharing economy, firms such as Airbnb (sharing homes), RelayRides (sharing cars) and ParkatmyHouse (sharing parking spaces) are taking advantage of the internet and social media to enable ordinary people to monetise their idle household assets.

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In June 2014, AmEx launched a Financial Innovation Lab, where researchers and counsellors work together to support credit building and savings; the lab’s results will be made publicly available. Through these multiple initiatives, AmEx is attempting to understand and solve a complex, multi-dimensional socio-economic problem. The unbanked and underbanked spend 10% of their $1 trillion disposable income on fees, the same amount as they spend on food. Schulman asks:13 “Imagine if you could turn loose almost $100 billion back into the economy?” Engage restless entrepreneurs, hackers and tinkerers Airbnb, an online short-let rental company, was launched in 2008 by Brian Chesky and Joe Gebbia, two young people with no experience of the hotel industry.

The Curse of Cash by Kenneth S Rogoff

Alan Greenspan, Andrei Shleifer, Asian financial crisis, bank run, Ben Bernanke: helicopter money, Berlin Wall, bitcoin, blockchain, Boris Johnson, Bretton Woods, business cycle, capital controls, Carmen Reinhart, cashless society, central bank independence, cryptocurrency, debt deflation, disruptive innovation, distributed ledger, Dr. Strangelove, Edward Snowden, Ethereum, ethereum blockchain, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial exclusion, financial intermediation, financial repression, forward guidance, frictionless, full employment, George Akerlof, German hyperinflation, government statistician, illegal immigration, inflation targeting, informal economy, interest rate swap, Isaac Newton, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, low interest rates, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, moveable type in China, New Economic Geography, offshore financial centre, oil shock, open economy, payday loans, price stability, purchasing power parity, quantitative easing, RAND corporation, RFID, savings glut, secular stagnation, seigniorage, The Great Moderation, the payments system, The Rise and Fall of American Growth, transaction costs, unbanked and underbanked, unconventional monetary instruments, underbanked, unorthodox policies, Y2K, yield curve

Low-income households and individuals go without banks for various reasons, including the inability to meet minimum deposit requirements, monthly service fees, and lack of convenient access in lower-income neighborhoods. In the United States, more than 8% of households were un-banked in 2013, according to an FDIC survey.3 Another 20% were underbanked, meaning they also used alternative financial services outside the banking system, including prepaid cards, payday loans, pawn shops, and check-cashing services. More than 25% of adult Americans do not have a credit card. Unfortunately, the cost of not having bank access is high. Check-cashing services charge exorbitant fees; for immigrants and others who need to wire funds abroad and transfer money to relatives, the transaction costs can amount to 10–15% or more.

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Review of Economic Studies 81 (2): 725–60. Farhi, Emmanuel, and Ivan Werning. 2016. “A Theory of Macroprudential Policies in the Presence of Nominal Rigidities” (May). Mimeo, Harvard University, Cambridge, MA. Forthcoming in Econometrica. Federal Deposit Insurance Corporation. 2014. “2013 FDIC National Survey of Unbanked and Underbanked Households.” Washington, DC. Available at https://www.fdic.gov/householdsurvey/. Federal Reserve Bank of Boston. 2012. “Diary of Consumer Payment Choice.” Boston. ———. 2013. “Survey of Consumer Payment Choice.” Boston. Federal Reserve Bank of San Francisco. 2004. “How Much Currency Is Circulating in the Economy, and How Much of It Is Counterfeit?”

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See also Bank of England United Nations Office on Drugs and Crime, 69, 74, 240n34 United States: Automated Clearing House system, 103; Bitcoin, regulation of, 210; cash circulating, amount of, 31–33; corruption in, 70–71; cost in GDP of buying back all paper currency, 217; counterfeiting, efforts to suppress, 77–78; currency entering or leaving the country, requirement to report large amounts of, 41; currency/GDP ratio, 1948–2015, 33, 36–37; currency/GDP ratio, 1995, 46; currency held by consumers, 3, 49–52; currency of, international significance of, 15–16; currency per capita, 37–38, 40; currency usage, 53–54; discount rate cuts in response to recent crises, 131–32; double-digit inflation, 183; foreign holdings of currency, 39–42, 236n19; foreign holdings of currency, 1985–2015, 45; foreign holdings of currency, estimating, 42–45; gold standard, post–World War I adjustments to, 29; the government’s profit from printing money, 81–82 (see also seigniorage); illegal drug market, estimated size of, 69; inflationary periods in, 27–28; Kleptocracy Asset Recovery Initiative, 72; large-denomination notes, 3, 31; negative interest rates in response to the financial crisis, 123; New York Federal Reserve discount rates, 1929–1939, 128–29; nominal policy interest rates, 2000–2015, 130; $100 bills, rise in demand for, 32–33; $100 North Korean counterfeit “supernote,” 78; paper currency, profits from monopoly on, 217; paper currency in colonial, 26–27; paper currency phaseout, costs and benefits of, 88–89; paper currency supply in small bills, percentage of, 85; payments by instrument type, 54; payments per dollar amount per consumer, 54; phaseout of large-denomination paper currency, proposal for, 95; quantitative easing in, 140–42; revenue as a percentage of GDP, 2006–2015, 83–84; scanner data from retail transactions, 56–57; sexual exploitation in, 74; short-term market interest rates, 1929–1939, 129; tax evasion in, 60–61, 83; terrorism and efforts to tighten enforcement of money-laundering regulations, 77; unauthorized immigrants in, 75; the unbanked and underbanked in, 98; underground economy, estimated size of, 62–63; Volcker’s disinflation effort, 119 universal financial inclusion, 98–100 Velde, François R., 19, 234n13 Venezuela, 184 Vietnam, 191 Vissing-Jorgensen, Annette, 141 Volcker, Paul, 119, 189, 191 Wallace, Neil, 104–5, 225–26 Wallace conjecture, 105, 225–26 Walsh, Carl, 231 Wang, Zhu, 56 Weber, Guglielmo, 239n13 Weber, Warren E., 234n13 Werning, Ivan, 251n3 White, Walter, 240n27 White, William, 176 Williams, John C., 133, 244n11, 245n17 Wolman, Alexander, 56, 244n11, 255n9 Wonderful Wizard of Oz, The (Baum), 192 Woodford, Michael, 145, 227, 230, 243n9 Wu, Jing Cynthia, 244n5, 247n28 Xerxes (king of Persia), 18 Xia, Fan Dora, 244n5, 247n28 Xi Jinping (president of People’s Republic of China), 71 Xu Caihou, 71 Yellen, Janet, 229, 255n5 zero bound constraint, 4–5, 119–27; black hole, similarity to, 124; consumption taxes as approach to, 156–57; fiscal policy and, 249n12; forward guidance as approach to, 145–46; higher inflation targets as approach to, 147–51; historical experiences with, 128–32; macroeconomic stabilization policy and, 124–25; mitigating, options for, 125–27; monetary policy and, 123–24, 227–30; opportunistic fiscal policy as approach to, 154–56; previous experiences of, 122; quantitative easing as approach to (see quantitative easing); quantitative implications of, literature on, 132–35; reemergence of, reasons for, 120–22; relaxing the rigidity of the inflation-targeting framework as approach to, 152–54; targeting nominal GDP as approach to, 151–52.

The Truth Machine: The Blockchain and the Future of Everything by Paul Vigna, Michael J. Casey

3D printing, additive manufacturing, Airbnb, altcoin, Amazon Web Services, barriers to entry, basic income, Berlin Wall, Bernie Madoff, Big Tech, bitcoin, blockchain, blood diamond, Blythe Masters, business process, buy and hold, carbon credits, carbon footprint, cashless society, circular economy, cloud computing, computer age, computerized trading, conceptual framework, content marketing, Credit Default Swap, cross-border payments, crowdsourcing, cryptocurrency, cyber-physical system, decentralized internet, dematerialisation, disinformation, disintermediation, distributed ledger, Donald Trump, double entry bookkeeping, Dunbar number, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, failed state, fake news, fault tolerance, fiat currency, financial engineering, financial innovation, financial intermediation, Garrett Hardin, global supply chain, Hernando de Soto, hive mind, informal economy, information security, initial coin offering, intangible asset, Internet of things, Joi Ito, Kickstarter, linked data, litecoin, longitudinal study, Lyft, M-Pesa, Marc Andreessen, market clearing, mobile money, money: store of value / unit of account / medium of exchange, Network effects, off grid, pets.com, post-truth, prediction markets, pre–internet, price mechanism, profit maximization, profit motive, Project Xanadu, ransomware, rent-seeking, RFID, ride hailing / ride sharing, Ross Ulbricht, Satoshi Nakamoto, self-driving car, sharing economy, Silicon Valley, smart contracts, smart meter, Snapchat, social web, software is eating the world, supply-chain management, Ted Nelson, the market place, too big to fail, trade route, Tragedy of the Commons, transaction costs, Travis Kalanick, Turing complete, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, universal basic income, Vitalik Buterin, web of trust, work culture , zero-sum game

CHAPTER SEVEN After a long multi-decade fight with the city: Jorge Salomón, “El barrio Charrúa, una pequeña Bolivia en el sur de Buenos Aires,” El País, February 12, 2016, http://www.elpaisonline.com/index.php/2013-01-15-14-16-26/sociedad/item/204708-el-barrio-charrua-una-pequena-bolivia-en-el-sur-de-buenos-aires. Hernando de Soto estimates that: Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Basic Books, 2000). 7.7 percent of the population is “unbanked,”: Lori London, “The Top 10 Unbanked and Underbanked Cities,” goEBT, March 29, 2017, https://www.goebt.com/the-top-10-unbanked-and-underbanked-cities/. For the more than 2 billion adults worldwide: Global Findex Database, World Bank, 2014, http://www.worldbank.org/en/programs/globalfindex. UN’s plan to eradicate global poverty: Sustainable Development Goals, United Nations, http://www.un.org/sustainabledevelopment/poverty/.

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Either way, anything that adds transparency to the multi-faceted picture of people’s lives should help institutions lower the cost of financing and insuring them. It’s not just a developing world problem. In the United States, 7.7 percent of the population is “unbanked,” meaning they don’t have bank accounts, and 17.9 percent are considered “underbanked,” meaning they rely upon payday, rent-to-own services, and the like. In Baltimore, 14 percent of residents are unbanked. In Memphis, it’s nearly 17 percent. In Detroit and Miami, it’s 20 percent. There are plenty of middle-class people who are penalized by the inability to prove their good standing, too.

The Purpose Economy: How Your Desire for Impact, Personal Growth and Community Is Changing the World by Aaron Hurst

Abraham Maslow, Airbnb, Alvin Toffler, Atul Gawande, barriers to entry, benefit corporation, big-box store, bike sharing, Bill Atkinson, business process, call centre, carbon footprint, citizen journalism, commoditize, corporate social responsibility, crowdsourcing, disintermediation, do well by doing good, Elon Musk, Firefox, General Magic , glass ceiling, greed is good, housing crisis, independent contractor, informal economy, Jane Jacobs, jimmy wales, Khan Academy, Kickstarter, Lean Startup, longitudinal study, Max Levchin, means of production, Mitch Kapor, new economy, pattern recognition, Peter Singer: altruism, Peter Thiel, QR code, Ray Oldenburg, remote working, Ronald Reagan, selection bias, sharing economy, Silicon Valley, Silicon Valley startup, Steve Jobs, TaskRabbit, TED Talk, Tony Hsieh, too big to fail, underbanked, women in the workforce, work culture , young professional, Zipcar

Online social networks, he figured, could enable people again to borrow money based on their character and standing in the community. In founding Lenddo, he not only saw the opportunity to create a more sustainable and sane form of banking, but also to serve the 2 billion people around the world who are currently “under-banked.” The future of personal and small business finance is social. By making banking social again and using technology to make it efficient, we can not only boost demand, but also increase the efficiency and reliability of underwriting and collections. By involving the community in deciding who gets a loan, it creates a selection bias, as people are more self-aware about the debt they should be taking on when it is transparent to their community.

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By involving the community in deciding who gets a loan, it creates a selection bias, as people are more self-aware about the debt they should be taking on when it is transparent to their community. And when people’s repayments impact the ability of their friends and family to borrow, they are much more likely to make their payments. Lenddo now focuses on lending to the middle class in developing countries, a population that is under-banked but also lives in regions with flexible government regulations that enable the innovation. And while most of their loans are modest by American banking standards, a $500 loan can make the difference between an education or having the ability to start a business. Lenddo now has 400,000 members across 38 countries and boasts loan rates that are the same or lower than traditional lenders.

Mastering Blockchain: Unlocking the Power of Cryptocurrencies and Smart Contracts by Lorne Lantz, Daniel Cawrey

air gap, altcoin, Amazon Web Services, barriers to entry, bitcoin, blockchain, business logic, business process, call centre, capital controls, cloud computing, corporate governance, creative destruction, cross-border payments, cryptocurrency, currency peg, disinformation, disintermediation, distributed ledger, Dogecoin, Ethereum, ethereum blockchain, fault tolerance, fiat currency, Firefox, global reserve currency, information security, initial coin offering, Internet of things, Kubernetes, litecoin, low interest rates, Lyft, machine readable, margin call, MITM: man-in-the-middle, multilevel marketing, Network effects, offshore financial centre, OSI model, packet switching, peer-to-peer, Ponzi scheme, prediction markets, QR code, ransomware, regulatory arbitrage, rent-seeking, reserve currency, Robinhood: mobile stock trading app, Ross Ulbricht, Satoshi Nakamoto, Silicon Valley, Skype, smart contracts, software as a service, Steve Wozniak, tulip mania, uber lyft, unbanked and underbanked, underbanked, Vitalik Buterin, web application, WebSocket, WikiLeaks

MoneyGram uses Ripple’s On-Demand Liquidity product to facilitate cheaper and faster cross-border payments. Stellar Launched in 2014, Stellar was founded by Jed McCaleb and Joyce Kim, who had both previously worked at Ripple. The Stellar protocol is supported by the 501(c)(3) nonprofit Stellar Development Foundation, created with the aim of providing a low-cost payment network for underbanked or unbanked individuals across the world. In the early days, Stellar used a similar consensus mechanism to Ripple’s. However, the Foundation changed the protocol in 2015, switching to SCP, a system devised by Stanford professor David Mazières. One of the reasons for switching from the Ripple-designed consensus mechanism was that the Stellar blockchain unexpectedly forked in 2014, creating two separate networks and causing problems with transactions.

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After the departure of Joyce Kim, the Foundation began a long pivot, founding a company called Lightyear.io in 2017 (which became Interstellar in 2018 after acquiring the blockchain company Chain) to promote and encourage adoption of the protocol. Like Ripple, Stellar is focusing on cross-border payments, albeit with a more unbanked and underbanked bent, attempting to provide services to those who lack financial access. Scaling Blockchains In technology terms, scaling is the ability of a network to dynamically change resource allocation while improving or maintaining efficiency. Scaling has been a challenge as Bitcoin has grown: as more transactions end up on the blockchain, the network needs to continue providing a cheap and easy way to transact.

Stake Hodler Capitalism: Blockchain and DeFi by Amr Hazem Wahba Metwaly

altcoin, Amazon Web Services, bitcoin, blockchain, business process, congestion charging, COVID-19, crowdsourcing, cryptocurrency, Ethereum, ethereum blockchain, fiat currency, information security, Internet of things, Network effects, non-fungible token, passive income, prediction markets, price stability, Satoshi Nakamoto, seigniorage, Skype, smart contracts, underbanked, Vitalik Buterin

Payments User-to-user payment is arguably the foundational use case of the DeFi domain and the blockchain ecosystem at large. Blockchain technology is wired so that users can safely and directly trade cryptocurrency without the presence of intermediaries. DeFi payment solutions build a more free economic system for the underbanked and unbanked populace and help big financial institutions streamlining market infrastructure and serve better wholesale and retail customers. Prediction markets Blockchain-based prediction markets impede the crowd's reasoning and help users vote and exchange value on the result of events.

The Bitcoin Guidebook: How to Obtain, Invest, and Spend the World's First Decentralized Cryptocurrency by Ian Demartino

3D printing, AltaVista, altcoin, bitcoin, Bitcoin Ponzi scheme, blockchain, buy low sell high, capital controls, cloud computing, Cody Wilson, corporate governance, crowdsourcing, cryptocurrency, decentralized internet, distributed ledger, Dogecoin, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, Firefox, forensic accounting, global village, GnuPG, Google Earth, Haight Ashbury, initial coin offering, Jacob Appelbaum, Kevin Kelly, Kickstarter, litecoin, M-Pesa, Marc Andreessen, Marshall McLuhan, Oculus Rift, peer-to-peer, peer-to-peer lending, Ponzi scheme, prediction markets, printed gun, QR code, ransomware, Ross Ulbricht, Salesforce, Satoshi Nakamoto, self-driving car, selling pickaxes during a gold rush, Skype, smart contracts, Steven Levy, the medium is the message, underbanked, WikiLeaks, Zimmermann PGP

It can be hard for residents of the US or other first world countries to remember, but there are huge populations without basic access to banking services. As many as 2.5 billion people, or about half of the world’s adult population, are unbanked with even more classified as underbanked. Bitcoin can provide these services for the unbanked—and with third-party tools, can already offer a lot to the underbanked.11 When people start receiving money from their emigrant family members without a double-digit fee, it stands to reason that some of them will become interested in Bitcoin. As they become more knowledgeable about Bitcoin, they might see its utility for storing value rather than simply as a mechanism for transferring value.

How I Invest My Money: Finance Experts Reveal How They Save, Spend, and Invest by Brian Portnoy, Joshua Brown

asset allocation, behavioural economics, bitcoin, blockchain, blue-collar work, buy and hold, coronavirus, COVID-19, cryptocurrency, diversification, diversified portfolio, estate planning, financial independence, fixed income, high net worth, housing crisis, index fund, John Bogle, low interest rates, mental accounting, passive investing, prediction markets, risk tolerance, Salesforce, Sharpe ratio, time value of money, underbanked, Vanguard fund

Tyrone is a proud first generation high school graduate whose life’s mission is to be a voice for the voiceless. He is passionate about financial literacy, ending childhood hunger, homelessness, and poverty. He currently resides in Woodbridge, NJ. I grew up in a financially illiterate home which dealt some hard financial lessons. At times we were unbanked and at others underbanked thanks to check cashing places. Scratch off tickets saved us plenty of days when money was short, which is why to this day I find it hard to curse the lottery. I was 26 before I knew that the stock market even existed. This wasn’t for lack of exposure, I guess. When I was in college I had a teammate that used to watch these green and red numbers float across the bottom of the TV screen before practice.

The Internet of Money by Andreas M. Antonopoulos

AltaVista, altcoin, bitcoin, blockchain, clean water, cognitive dissonance, cryptocurrency, disruptive innovation, Dogecoin, Ethereum, ethereum blockchain, financial exclusion, global reserve currency, information security, litecoin, London Interbank Offered Rate, Marc Andreessen, Oculus Rift, packet switching, peer-to-peer lending, Ponzi scheme, QR code, ransomware, reserve currency, Satoshi Nakamoto, self-driving car, skeuomorphism, Skype, smart contracts, the medium is the message, trade route, Tragedy of the Commons, underbanked, WikiLeaks, zero-sum game

"Consider what we’ve been talking about: financial transactions, banking, payments. It’s a fancy credit card. It’s Paypal, basically. It’s a global Paypal. But it’s not. It’s something completely, radically different." Today, there are 3 billion people with no banking facilities whatsoever. Three billion more people—“underbanked,” as we call them—without any access to international credit or finance. You or I can go to a brokerage website right now and within 24 hours have a US-dollar-denominated account that can trade on the Tokyo stock exchange. That is privilege. That is a facility afforded to less than a billion people in the world.

Data-Ism: The Revolution Transforming Decision Making, Consumer Behavior, and Almost Everything Else by Steve Lohr

"World Economic Forum" Davos, 23andMe, Abraham Maslow, Affordable Care Act / Obamacare, Albert Einstein, Alvin Toffler, Bear Stearns, behavioural economics, big data - Walmart - Pop Tarts, bioinformatics, business cycle, business intelligence, call centre, Carl Icahn, classic study, cloud computing, computer age, conceptual framework, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, Danny Hillis, data is the new oil, data science, David Brooks, driverless car, East Village, Edward Snowden, Emanuel Derman, Erik Brynjolfsson, everywhere but in the productivity statistics, financial engineering, Frederick Winslow Taylor, Future Shock, Google Glasses, Ida Tarbell, impulse control, income inequality, indoor plumbing, industrial robot, informal economy, Internet of things, invention of writing, Johannes Kepler, John Markoff, John von Neumann, lifelogging, machine translation, Mark Zuckerberg, market bubble, meta-analysis, money market fund, natural language processing, obamacare, pattern recognition, payday loans, personalized medicine, planned obsolescence, precision agriculture, pre–internet, Productivity paradox, RAND corporation, rising living standards, Robert Gordon, Robert Solow, Salesforce, scientific management, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, SimCity, six sigma, skunkworks, speech recognition, statistical model, Steve Jobs, Steven Levy, The Design of Experiments, the scientific method, Thomas Kuhn: the structure of scientific revolutions, Tony Fadell, unbanked and underbanked, underbanked, Von Neumann architecture, Watson beat the top human players on Jeopardy!, yottabyte

Consider start-up ZestFinance: Douglas Merrill’s descriptions and quotes come from an interview on Oct. 30, 2013. fees paid by payday borrowers: For the average borrowers and amounts outstanding, Merrill did his own current estimates as of late 2013. But he also referenced the Federal Deposit Insurance Corporation’s report in September 2012, 2011 FDIC National Survey of Unbanked and Underbanked Households. http://www.fdic.gov/householdsurvey/2012_unbankedreport.pdf. And he also referred to a July 2012 report by the Pew Charitable Trusts, Payday Lending in America: Who Borrows, Where They Borrow, and Why. http://www.pewtrusts.org/en/research-and-analysis/reports/2012/07/19/who-borrows-where-they-borrow-and-why.

A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Carbon Emissions by Muhammad Yunus

"Friedman doctrine" OR "shareholder theory", active measures, Bernie Sanders, biodiversity loss, Capital in the Twenty-First Century by Thomas Piketty, clean water, conceptual framework, crony capitalism, data science, distributed generation, Donald Trump, financial engineering, financial independence, fixed income, full employment, high net worth, income inequality, Indoor air pollution, Internet of things, invisible hand, Jeff Bezos, job automation, Lean Startup, Marc Benioff, Mark Zuckerberg, megacity, microcredit, new economy, Occupy movement, profit maximization, Silicon Valley, the market place, The Wealth of Nations by Adam Smith, too big to fail, Tragedy of the Commons, unbanked and underbanked, underbanked, urban sprawl, young professional

I have been advocating for years to create new banking laws to allow the setting up of banks for the poor as opposed to the present laws focused on creating banks for the rich. Doing patchwork on the existing laws to allow noncollateralized lending to the unbanked can have very little success—especially while the need for banking for the unbanked and underbanked is so vast. I try to present the case by pointing out that financial services are the oxygen of individual economic life. This oxygen is delivered extremely generously to the topmost people; in fact, they enjoy a kind of economic fire that sucks up nearly all the oxygen that is available. In this way the financial system helps cause the extreme concentration of wealth in the world.

Automating Inequality by Virginia Eubanks

autonomous vehicles, basic income, Black Lives Matter, business process, call centre, cognitive dissonance, collective bargaining, correlation does not imply causation, data science, deindustrialization, digital divide, disruptive innovation, Donald Trump, driverless car, Elon Musk, ending welfare as we know it, experimental subject, fake news, gentrification, housing crisis, Housing First, IBM and the Holocaust, income inequality, job automation, mandatory minimum, Mark Zuckerberg, mass incarceration, minimum wage unemployment, mortgage tax deduction, new economy, New Urbanism, payday loans, performance metric, Ronald Reagan, San Francisco homelessness, self-driving car, sparse data, statistical model, strikebreaker, underbanked, universal basic income, urban renewal, W. E. B. Du Bois, War on Poverty, warehouse automation, working poor, Works Progress Administration, young professional, zero-sum game

While the algorithms that drive this target-marketing don’t explicitly use race to make decisions—a practice outlawed by the Fair Housing Act of 1968—a category like “Ethnic Second-City Strugglers” is clearly a proxy for both race and class.6 Disadvantaged communities are then targeted for subprime lending, payday loans, or other exploitative financial products. Reverse redlining is rational discrimination. It is not discriminatory in the sense that it relies on hostile choices being made by racist or classist individuals. In fact, it is often characterized as inclusionary: it provides access to financial products in “underbanked” neighborhoods. But its outwardly neutral classifications mask discriminatory outcomes that rob whole communities of wealth, compounding cumulative disadvantage. The digital poorhouse replaces the sometimes-biased decision-making of frontline social workers with the rational discrimination of high-tech tools.

Broken Markets: A User's Guide to the Post-Finance Economy by Kevin Mellyn

Alan Greenspan, banking crisis, banks create money, Basel III, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, bond market vigilante , Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, call centre, Carmen Reinhart, central bank independence, centre right, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, compensation consultant, corporate governance, corporate raider, creative destruction, credit crunch, crony capitalism, currency manipulation / currency intervention, currency risk, disintermediation, eurozone crisis, fiat currency, financial innovation, financial repression, floating exchange rates, Fractional reserve banking, Glass-Steagall Act, global reserve currency, global supply chain, Home mortgage interest deduction, index fund, information asymmetry, joint-stock company, Joseph Schumpeter, junk bonds, labor-force participation, light touch regulation, liquidity trap, London Interbank Offered Rate, low interest rates, market bubble, market clearing, Martin Wolf, means of production, Michael Milken, mobile money, Money creation, money market fund, moral hazard, mortgage debt, mortgage tax deduction, negative equity, Nixon triggered the end of the Bretton Woods system, Paul Volcker talking about ATMs, Ponzi scheme, profit motive, proprietary trading, prudent man rule, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, rising living standards, Ronald Coase, Savings and loan crisis, seigniorage, shareholder value, Silicon Valley, SoftBank, Solyndra, statistical model, Steve Jobs, The Great Moderation, the payments system, Tobin tax, too big to fail, transaction costs, underbanked, Works Progress Administration, yield curve, Yogi Berra, zero-sum game

Inhibiting banks from investing in this revolution will not halt progress entirely, but it will keep much of it in unregulated corners of the universe. Nowhere is this truer than in the critical arena of consumer payments. 69 70 Chapter 3 | The Economic Consequences of Financial Regulation Unbanking the Banked For a high-income industrial society, America already has a staggering ­number of unbanked or underbanked households, estimated by the FDIC at a quarter of the total economically active population. Some of this reflects the high level of recent immigration, legal and undocumented, and the number of households living below the poverty line—both factors that set America apart from other rich countries and always has.

Smart Money: How High-Stakes Financial Innovation Is Reshaping Our WorldÑFor the Better by Andrew Palmer

Affordable Care Act / Obamacare, Alan Greenspan, algorithmic trading, Andrei Shleifer, asset-backed security, availability heuristic, bank run, banking crisis, behavioural economics, Black Monday: stock market crash in 1987, Black-Scholes formula, bonus culture, break the buck, Bretton Woods, call centre, Carmen Reinhart, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Graeber, diversification, diversified portfolio, Edmond Halley, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, family office, financial deregulation, financial engineering, financial innovation, fixed income, Flash crash, Google Glasses, Gordon Gekko, high net worth, housing crisis, Hyman Minsky, impact investing, implied volatility, income inequality, index fund, information asymmetry, Innovator's Dilemma, interest rate swap, Kenneth Rogoff, Kickstarter, late fees, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, low interest rates, margin call, Mark Zuckerberg, McMansion, Minsky moment, money market fund, mortgage debt, mortgage tax deduction, Myron Scholes, negative equity, Network effects, Northern Rock, obamacare, payday loans, peer-to-peer lending, Peter Thiel, principal–agent problem, profit maximization, quantitative trading / quantitative finance, railway mania, randomized controlled trial, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Savings and loan crisis, short selling, Silicon Valley, Silicon Valley startup, Skype, South Sea Bubble, sovereign wealth fund, statistical model, subprime mortgage crisis, tail risk, Thales of Miletus, the long tail, transaction costs, Tunguska event, unbanked and underbanked, underbanked, Vanguard fund, web application

“Withering Away,” Economist, May 19, 2012. 4. Harry DeAngelo and René Stulz, “Why High Leverage Is Optimal for Banks” (NBER Working Paper 19139, August 2013). NOTES TO CHAPTER 8 1. Victor Stango, “Are Payday Lending Markets Competitive?” Regulation (Fall 2012); “National Survey of Unbanked and Underbanked Households” (Federal Deposit Insurance Corporation, 2011). 2. “Margin Calls,” Economist, February 16, 2013. 3. Meta Brown et al., “The Financial Crisis at the Kitchen Table: Trends in Household Debt and Credit,” Current Issues in Economics and Finance 19 (2013). 4. Atif Mian and Amir Sufi, “The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis” (NBER Working Paper 13936, April 2008). 5.

API Marketplace Engineering: Design, Build, and Run a Platform for External Developers by Rennay Dorasamy

Airbnb, Amazon Web Services, barriers to entry, business logic, business process, butterfly effect, continuous integration, DevOps, digital divide, disintermediation, fault tolerance, if you build it, they will come, information security, Infrastructure as a Service, Internet of things, Jeff Bezos, Kanban, Kubernetes, Lyft, market fragmentation, microservices, minimum viable product, MITM: man-in-the-middle, mobile money, optical character recognition, platform as a service, pull request, ride hailing / ride sharing, speech recognition, the payments system, transaction costs, two-pizza team, Uber and Lyft, uber lyft, underbanked, web application

Promotion of financial inclusion, competition and innovation, and cost-effectiveness: Open Banking may help to create a level playing field for all stakeholders to offer services and solutions. It should allow banking services to a wide range of customers – from offering high-earners a personalized investment product to assisting underbanked customers to access banking services. From an implementation perspective, smaller banks and third parties should be able to participate without significant investment capital and technological infrastructure. Terminology When navigating Open Banking regulatory frameworks, you may encounter many new terms and classifications.

Digital Bank: Strategies for Launching or Becoming a Digital Bank by Chris Skinner

algorithmic trading, AltaVista, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, augmented reality, bank run, Basel III, bitcoin, Bitcoin Ponzi scheme, business cycle, business intelligence, business process, business process outsourcing, buy and hold, call centre, cashless society, clean water, cloud computing, corporate social responsibility, credit crunch, cross-border payments, crowdsourcing, cryptocurrency, demand response, disintermediation, don't be evil, en.wikipedia.org, fault tolerance, fiat currency, financial innovation, gamification, Google Glasses, high net worth, informal economy, information security, Infrastructure as a Service, Internet of things, Jeff Bezos, Kevin Kelly, Kickstarter, M-Pesa, margin call, mass affluent, MITM: man-in-the-middle, mobile money, Mohammed Bouazizi, new economy, Northern Rock, Occupy movement, Pingit, platform as a service, Ponzi scheme, prediction markets, pre–internet, QR code, quantitative easing, ransomware, reserve currency, RFID, Salesforce, Satoshi Nakamoto, Silicon Valley, smart cities, social intelligence, software as a service, Steve Jobs, strong AI, Stuxnet, the long tail, trade route, unbanked and underbanked, underbanked, upwardly mobile, vertical integration, We are the 99%, web application, WikiLeaks, Y2K

The discussion of their success is covered later in this journal in my interview with John Maynard, but the key comment he makes is that since M-PESA launched in 2007, the number of people who now have bank accounts with the traditional banks has almost quadrupled. The reason? As mobile money provides inclusion for the unbanked and underbanked, they become recognised as financially viable citizens and therefore for financial inclusion by being banked. Similarly, when banks find they cannot offer services to customers through this credit crisis that were previously offered, such as credit, other services gain traction. This is clear from the rise of crowdfunding platforms like kickstarter and social lending services like Zopa, Smava and Prosper.

Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy by Nathan Schneider

1960s counterculture, Aaron Swartz, Adam Curtis, Affordable Care Act / Obamacare, Airbnb, altcoin, Amazon Mechanical Turk, antiwork, back-to-the-land, basic income, Berlin Wall, Bernie Sanders, bitcoin, Black Lives Matter, blockchain, Brewster Kahle, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Clayton Christensen, collaborative economy, collective bargaining, commons-based peer production, Community Supported Agriculture, corporate governance, creative destruction, crowdsourcing, cryptocurrency, Debian, degrowth, disruptive innovation, do-ocracy, Donald Knuth, Donald Trump, Edward Snowden, Elon Musk, emotional labour, Ethereum, ethereum blockchain, Evgeny Morozov, Fairphone, Food sovereignty, four colour theorem, future of work, Gabriella Coleman, gentrification, gig economy, Google bus, holacracy, hydraulic fracturing, initial coin offering, intentional community, Internet Archive, Jeff Bezos, Jeremy Corbyn, jimmy wales, John Perry Barlow, joint-stock company, Joseph Schumpeter, Julian Assange, Kevin Roose, Kickstarter, low interest rates, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, mass immigration, means of production, Money creation, multi-sided market, Murray Bookchin, new economy, offshore financial centre, old-boy network, Peter H. Diamandis: Planetary Resources, Pier Paolo Pasolini, post-work, precariat, premature optimization, pre–internet, profit motive, race to the bottom, Richard Florida, Richard Stallman, ride hailing / ride sharing, Rutger Bregman, Salesforce, Sam Altman, Satoshi Nakamoto, self-driving car, shareholder value, sharing economy, Silicon Valley, Slavoj Žižek, smart contracts, Steve Bannon, Steve Jobs, Steve Wozniak, Stewart Brand, surveillance capitalism, tech worker, TED Talk, transaction costs, Turing test, Uber and Lyft, uber lyft, underbanked, undersea cable, universal basic income, Upton Sinclair, Vanguard fund, Vitalik Buterin, W. E. B. Du Bois, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, working poor, workplace surveillance , Y Combinator, Y2K, Zipcar

This was unquestionably a breakthrough. For the first time, the technology underlying Bitcoin made possible a secure, decentralized, open-source financial network. Users wouldn’t have to trust any bank or government, just the software. Boosters announced that financial freedom would soon be at the fingertips of the previously under-banked, and people anywhere in the world could send money over the internet with negligible overhead. Nakamoto prophesied in that 2009 forum post, “It takes advantage of the nature of information being easy to spread but hard to stifle.” In essence, Bitcoin is a list, held in common among its users—a list of transactions, a record of which account holds what.

Amazon: How the World’s Most Relentless Retailer Will Continue to Revolutionize Commerce by Natalie Berg, Miya Knights

3D printing, Adam Neumann (WeWork), Airbnb, Amazon Robotics, Amazon Web Services, asset light, augmented reality, Bernie Sanders, big-box store, business intelligence, cloud computing, Colonization of Mars, commoditize, computer vision, connected car, deep learning, DeepMind, digital divide, Donald Trump, Doomsday Clock, driverless car, electronic shelf labels (ESLs), Elon Musk, fulfillment center, gig economy, independent contractor, Internet of things, inventory management, invisible hand, Jeff Bezos, Kiva Systems, market fragmentation, new economy, Ocado, pattern recognition, Ponzi scheme, pre–internet, QR code, race to the bottom, random stow, recommendation engine, remote working, Salesforce, sensor fusion, sharing economy, Skype, SoftBank, Steve Bannon, sunk-cost fallacy, supply-chain management, TaskRabbit, TechCrunch disrupt, TED Talk, trade route, underbanked, urban planning, vertical integration, warehouse automation, warehouse robotics, WeWork, white picket fence, work culture

For example, it launched a pay-monthly Prime membership scheme in 2016. For shoppers, this option actually works out more expensive on an annual basis ($156 versus $119) but provides an alternative way to access Amazon if customers are unwilling or unable to pay the annual fee in one lump sum. Meanwhile, Amazon has homed in on the unbanked/underbanked consumer by launching a discounted Prime membership for those receiving government assistance, as well as Amazon Cash, a scheme that allows shoppers to deposit cash into their Amazon account by scanning a barcode at participating stores. This has since been rolled out in the UK as well, where it is branded Top Up.

Practical Doomsday: A User's Guide to the End of the World by Michal Zalewski

accounting loophole / creative accounting, AI winter, anti-communist, artificial general intelligence, bank run, big-box store, bitcoin, blockchain, book value, Buy land – they’re not making it any more, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carrington event, clean water, coronavirus, corporate governance, COVID-19, cryptocurrency, David Graeber, decentralized internet, deep learning, distributed ledger, diversification, diversified portfolio, Dogecoin, dumpster diving, failed state, fiat currency, financial independence, financial innovation, fixed income, Fractional reserve banking, Francis Fukuyama: the end of history, Haber-Bosch Process, housing crisis, index fund, indoor plumbing, information security, inventory management, Iridium satellite, Joan Didion, John Bogle, large denomination, lifestyle creep, mass immigration, McDonald's hot coffee lawsuit, McMansion, medical bankruptcy, Modern Monetary Theory, money: store of value / unit of account / medium of exchange, moral panic, non-fungible token, nuclear winter, off-the-grid, Oklahoma City bombing, opioid epidemic / opioid crisis, paperclip maximiser, passive investing, peak oil, planetary scale, ransomware, restrictive zoning, ride hailing / ride sharing, risk tolerance, Ronald Reagan, Satoshi Nakamoto, Savings and loan crisis, self-driving car, shareholder value, Silicon Valley, supervolcano, systems thinking, tech worker, Ted Kaczynski, TED Talk, Tunguska event, underbanked, urban sprawl, Wall-E, zero-sum game, zoonotic diseases

In the United States, many large-denomination bills, such as the $1,000 banknote, were effectively removed from circulation and are probably not coming back. Any commercial cash transactions over $10,000 need to be reported to the Internal Revenue Service on Form 8300 too. Meanwhile, in parts of Europe, it’s flat out illegal to use paper money for most transactions in excess of a threshold as low as €1,000.17 As the percentage of underbanked populations around the world is shrinking rapidly, some economists and policymakers are openly talking about a cashless future where no transaction can escape government oversight. Diversified Bank Deposits Although not completely risk-free, money in the bank is still a valuable tool. It provides instantaneous and convenient liquidity, and in perhaps nine out of ten economic crises, holds up value very well.

Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud by Ben McKenzie, Jacob Silverman

algorithmic trading, asset allocation, bank run, barriers to entry, Ben McKenzie, Bernie Madoff, Big Tech, bitcoin, Bitcoin "FTX", blockchain, capital controls, citizen journalism, cognitive dissonance, collateralized debt obligation, COVID-19, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, cryptocurrency, data science, distributed ledger, Dogecoin, Donald Trump, effective altruism, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, experimental economics, financial deregulation, financial engineering, financial innovation, Flash crash, Glass-Steagall Act, high net worth, housing crisis, information asymmetry, initial coin offering, Jacob Silverman, Jane Street, low interest rates, Lyft, margin call, meme stock, money market fund, money: store of value / unit of account / medium of exchange, Network effects, offshore financial centre, operational security, payday loans, Peter Thiel, Ponzi scheme, Potemkin village, prediction markets, proprietary trading, pushing on a string, QR code, quantitative easing, race to the bottom, ransomware, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Robinhood: mobile stock trading app, Ross Ulbricht, Sam Bankman-Fried, Satoshi Nakamoto, Saturday Night Live, short selling, short squeeze, Silicon Valley, Skype, smart contracts, Steve Bannon, systems thinking, TikTok, too big to fail, transaction costs, tulip mania, uber lyft, underbanked, vertical integration, zero-sum game

I got all sorts of hate from dudes with laser eyes in their profiles. I did not anticipate SBF himself would respond. “BUT WHAT IF IT GOES UP IN PRICE LATER??? DID YOU THINK ABOUT THAT?!?!!!?!? (but seriously–I totally agree that crypto needs more oversight and some cleaning up! I also think it presents huge opportunities for payments, underbanked, equitable access, and market structure.)” I had, in fact, considered the possibility of “number go up.” It was central to my understanding of what crypto was all about: gambling. I had been following Sam on Twitter, and he started following me back. I DMed him. It was the start of a periodic conversation that would continue for months.

The Industries of the Future by Alec Ross

"World Economic Forum" Davos, 23andMe, 3D printing, Airbnb, Alan Greenspan, algorithmic bias, algorithmic trading, AltaVista, Anne Wojcicki, autonomous vehicles, banking crisis, barriers to entry, Bernie Madoff, bioinformatics, bitcoin, Black Lives Matter, blockchain, Boston Dynamics, Brian Krebs, British Empire, business intelligence, call centre, carbon footprint, clean tech, cloud computing, collaborative consumption, connected car, corporate governance, Credit Default Swap, cryptocurrency, data science, David Brooks, DeepMind, Demis Hassabis, disintermediation, Dissolution of the Soviet Union, distributed ledger, driverless car, Edward Glaeser, Edward Snowden, en.wikipedia.org, Erik Brynjolfsson, Evgeny Morozov, fiat currency, future of work, General Motors Futurama, global supply chain, Google X / Alphabet X, Gregor Mendel, industrial robot, information security, Internet of things, invention of the printing press, Jaron Lanier, Jeff Bezos, job automation, John Markoff, Joi Ito, Kevin Roose, Kickstarter, knowledge economy, knowledge worker, lifelogging, litecoin, low interest rates, M-Pesa, machine translation, Marc Andreessen, Mark Zuckerberg, Max Levchin, Mikhail Gorbachev, military-industrial complex, mobile money, money: store of value / unit of account / medium of exchange, Nelson Mandela, new economy, off-the-grid, offshore financial centre, open economy, Parag Khanna, paypal mafia, peer-to-peer, peer-to-peer lending, personalized medicine, Peter Thiel, precision agriculture, pre–internet, RAND corporation, Ray Kurzweil, recommendation engine, ride hailing / ride sharing, Rubik’s Cube, Satoshi Nakamoto, selective serotonin reuptake inhibitor (SSRI), self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, social graph, software as a service, special economic zone, supply-chain management, supply-chain management software, technoutopianism, TED Talk, The Future of Employment, Travis Kalanick, underbanked, unit 8200, Vernor Vinge, Watson beat the top human players on Jeopardy!, women in the workforce, work culture , Y Combinator, young professional

Zac argues that the financial industry has been hampered by antiquated data systems, which have made them opaque to customers. “Banks and hospitals are the only places in the world where you walk into them and you don’t know what they sell. There is no list of products. There is no list of prices. So, if you are an underbanked person in Oakland and you walk into a local branch of, say, Wells Fargo, there’s columns, there’s carpeting, there’s desks. But you have no idea what to do. It is no surprise to me that you would be intimidated and have trouble opening a bank account. On the other side of the world there may not even be established banks.

The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives by Peter H. Diamandis, Steven Kotler

Ada Lovelace, additive manufacturing, Airbnb, Albert Einstein, AlphaGo, Amazon Mechanical Turk, Amazon Robotics, augmented reality, autonomous vehicles, barriers to entry, Big Tech, biodiversity loss, bitcoin, blockchain, blood diamond, Boston Dynamics, Burning Man, call centre, cashless society, Charles Babbage, Charles Lindbergh, Clayton Christensen, clean water, cloud computing, Colonization of Mars, computer vision, creative destruction, CRISPR, crowdsourcing, cryptocurrency, data science, Dean Kamen, deep learning, deepfake, DeepMind, delayed gratification, dematerialisation, digital twin, disruptive innovation, Donald Shoup, driverless car, Easter island, Edward Glaeser, Edward Lloyd's coffeehouse, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Ethereum, ethereum blockchain, experimental economics, fake news, food miles, Ford Model T, fulfillment center, game design, Geoffrey West, Santa Fe Institute, gig economy, gigafactory, Google X / Alphabet X, gravity well, hive mind, housing crisis, Hyperloop, impact investing, indoor plumbing, industrial robot, informal economy, initial coin offering, intentional community, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the telegraph, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joseph Schumpeter, Kevin Kelly, Kickstarter, Kiva Systems, late fees, Law of Accelerating Returns, life extension, lifelogging, loss aversion, Lyft, M-Pesa, Mary Lou Jepsen, Masayoshi Son, mass immigration, megacity, meta-analysis, microbiome, microdosing, mobile money, multiplanetary species, Narrative Science, natural language processing, Neal Stephenson, Neil Armstrong, Network effects, new economy, New Urbanism, Nick Bostrom, Oculus Rift, One Laptop per Child (OLPC), out of africa, packet switching, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, Peter Thiel, planned obsolescence, QR code, RAND corporation, Ray Kurzweil, RFID, Richard Feynman, Richard Florida, ride hailing / ride sharing, risk tolerance, robo advisor, Satoshi Nakamoto, Second Machine Age, self-driving car, Sidewalk Labs, Silicon Valley, Skype, smart cities, smart contracts, smart grid, Snapchat, SoftBank, sovereign wealth fund, special economic zone, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steve Jurvetson, Steven Pinker, Stewart Brand, supercomputer in your pocket, supply-chain management, tech billionaire, technoutopianism, TED Talk, Tesla Model S, Tim Cook: Apple, transaction costs, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, urban planning, Vision Fund, VTOL, warehouse robotics, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, X Prize

With AI, huge groups of people can come together, share financial information, and pool risk, becoming the peer-to-peer market now known as “crowdlending.” Prosper, Funding Circle, and LendingTree are three examples in a market expected to grow from $26.16 billion in 2015 to $897.85 billion by 2024. A different example is the Smart Finance Group. Created in 2013 to serve China’s massive unbanked and underbanked population, Smart Finance uses an AI to comb a user’s personal data—social media data, smartphone data, educational and employment history, etc.—to generate a reliable credit score nearly instantly. With this method, they can approve a peer-to-peer loan in under eight seconds, including microloans to the unbanked.

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

Airbnb, Alan Greenspan, altcoin, Apple Newton, bank run, banking crisis, bitcoin, Bitcoin Ponzi scheme, blockchain, Bretton Woods, buy and hold, California gold rush, capital controls, carbon footprint, clean water, Cody Wilson, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cross-border payments, cryptocurrency, David Graeber, decentralized internet, disinformation, disintermediation, Dogecoin, driverless car, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, financial engineering, financial innovation, Firefox, Flash crash, Ford Model T, Fractional reserve banking, Glass-Steagall Act, hacker house, Hacker News, Hernando de Soto, high net worth, informal economy, intangible asset, Internet of things, inventory management, Joi Ito, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, Money creation, money: store of value / unit of account / medium of exchange, Nelson Mandela, Network effects, new economy, new new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, off-the-grid, offshore financial centre, payday loans, Pearl River Delta, peer-to-peer, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, printed gun, profit motive, QR code, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, underbanked, Vitalik Buterin, WikiLeaks, Y Combinator, Y2K, zero-sum game, Zimmermann PGP

The problem isn’t limited to the emerging markets. In Canada, the United Kingdom, Germany, and Australia, the proportion of people above the age of fifteen with a bank account ranges from 96 percent to 99 percent. But head to the United States, and the figure slips to 88 percent. Add in a separate “underbanked” category—that is, those who may have a bank account, but also are driven to “nontraditional” banking sources such as check cashers or payday loans—and the percentage of the American population with insufficient access to the financial system exceeds 30 percent. Whereas China has delivered bank accounts to 64 percent of its people, in Argentina, despite Buenos Aires’ large, educated, and internationally savvy middle-class population, just 33 percent of the country is banked, a figure less even than India’s 35 percent.

Investment: A History by Norton Reamer, Jesse Downing

activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, asset allocation, backtesting, banking crisis, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, book value, break the buck, Brownian motion, business cycle, buttonwood tree, buy and hold, California gold rush, capital asset pricing model, Carmen Reinhart, carried interest, colonial rule, Cornelius Vanderbilt, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, debt deflation, discounted cash flows, diversified portfolio, dogs of the Dow, equity premium, estate planning, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, family office, Fellow of the Royal Society, financial innovation, fixed income, flying shuttle, Glass-Steagall Act, Gordon Gekko, Henri Poincaré, Henry Singleton, high net worth, impact investing, index fund, information asymmetry, interest rate swap, invention of the telegraph, James Hargreaves, James Watt: steam engine, John Bogle, joint-stock company, Kenneth Rogoff, labor-force participation, land tenure, London Interbank Offered Rate, Long Term Capital Management, loss aversion, Louis Bachelier, low interest rates, managed futures, margin call, means of production, Menlo Park, merger arbitrage, Michael Milken, money market fund, moral hazard, mortgage debt, Myron Scholes, negative equity, Network effects, new economy, Nick Leeson, Own Your Own Home, Paul Samuelson, pension reform, Performance of Mutual Funds in the Period, Ponzi scheme, Post-Keynesian economics, price mechanism, principal–agent problem, profit maximization, proprietary trading, quantitative easing, RAND corporation, random walk, Renaissance Technologies, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Sand Hill Road, Savings and loan crisis, seminal paper, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spinning jenny, statistical arbitrage, survivorship bias, tail risk, technology bubble, Teledyne, The Wealth of Nations by Adam Smith, time value of money, tontine, too big to fail, transaction costs, two and twenty, underbanked, Vanguard fund, working poor, yield curve

Over time, more public equities have been held by insurance companies (growing at a 5 percent annual clip from 2000 to 2010).41 The establishment of insurance companies as investment vehicles is directly linked to the vast expansion of individuals who are participating in life insurance, savings, and investment activities. Savings Accounts Chapter 3 discussed evidence of life-cycle savings by female servants in the context of retirement. Here, the analysis broadens to the history of savings vehicles. Savings societies allowed the previously underbanked (most notably, the working poor) to access the benefits of a depository institution, and they grew in prominence in the early nineteenth century. The Philadelphia Saving Fund Society was the first American mutual savings bank, commencing its dealings in 1816. The first chartered US mutual savings bank was the Provident Institution for Savings in Boston, which began serving the public that same year.

Liberalism at Large: The World According to the Economist by Alex Zevin

"there is no alternative" (TINA), activist fund / activist shareholder / activist investor, affirmative action, Alan Greenspan, anti-communist, Asian financial crisis, bank run, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, business cycle, capital controls, carbon tax, centre right, Chelsea Manning, collective bargaining, Columbine, Corn Laws, corporate governance, corporate social responsibility, creative destruction, credit crunch, David Ricardo: comparative advantage, debt deflation, desegregation, disinformation, disruptive innovation, do well by doing good, Donald Trump, driverless car, Edward Snowden, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Francis Fukuyama: the end of history, full employment, Gini coefficient, Glass-Steagall Act, global supply chain, guns versus butter model, hiring and firing, imperial preference, income inequality, interest rate derivative, invisible hand, It's morning again in America, Jeremy Corbyn, John von Neumann, Joseph Schumpeter, Julian Assange, junk bonds, Khartoum Gordon, land reform, liberal capitalism, liberal world order, light touch regulation, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, means of production, Michael Milken, Mikhail Gorbachev, Monroe Doctrine, Mont Pelerin Society, moral hazard, Naomi Klein, new economy, New Journalism, Nixon triggered the end of the Bretton Woods system, no-fly zone, Norman Macrae, Northern Rock, Occupy movement, Philip Mirowski, plutocrats, post-war consensus, price stability, quantitative easing, race to the bottom, railway mania, rent control, rent-seeking, road to serfdom, Ronald Reagan, Rosa Parks, Seymour Hersh, Snapchat, Socratic dialogue, Steve Bannon, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade liberalization, trade route, unbanked and underbanked, underbanked, unorthodox policies, upwardly mobile, War on Poverty, WikiLeaks, Winter of Discontent, Yom Kippur War, young professional

In red, white and black, the cover read ‘Pro Logo’, and savaged the Canadian activist Naomi Klein for her ‘utterly wrong-headed’ No Logo (1999), the best-selling ‘bible of the anti-globalisation movement’.49 For his part, Emmott spied untrammelled vistas for financial innovation until the end. In his last signed piece in 2006, he hailed US banks for entering sectors served only by payday lenders and pawnbrokers. Citibank signed an agreement with 7-Eleven to put cash machines in 5,500 stores, while credit card companies ‘targeted the unbanked and under-banked’ – poor minorities and immigrants, who stood to gain from access to cheaper credit. (Banks anticipated culling $9 billion in fees from them, and that was ‘before any cross-selling of other products’.) The subprime mortgage crisis hit the next year. Among the community banks Emmott cited as paragons, just one limped into 2012.50 Yet the crash barely checked his stride.