Banking should be run as a service similar to schools and hospitals, not for the purpose of maximising profit for a private owner but to serve a common good, according to an economic campaign leader.
Addressing the Transparency Task Force conference in London on Thursday (20 September), Matt Mayer, co-founder of Economy for the Common Good (ECG) UK, said the current economic system had evolved away from capitalism into a breed of corporatism which was fuelling issues such as inequality and financial instability.
He said: "The fundamental idea that sits at the heart of the system is that companies and corporations need to be run in order to maximise profit and return on investment - the word maximise is very important here because we are not against profit or returns, but rather it is about this negative spiral which is created with the idea that you must maximise that profit."
The current economic system, Mr Mayer said, was a free market with the essential goal of accumulation of wealth, with a strategy based on competition and success indicators driven by a company’s profit and national growth of gross domestic product (GDP).
He said: "The pressure of maximising investment and profit will always win against any competing interest, such as the fair treatment of workers, the environment - it causes shortcuts and deception."
Mr Mayer said the ECG economic model was also a free market economy but with an ultimate goal of achieving a common good from all economic activity with a strategy of collaboration before competition. He described it as a bold vision centred on a practical model for a new economic system.
He said: "A company’s success indicators would be measured on a ‘common good balance sheet’ defined by who matters - all stakeholders, not just investors but also employees and customers and suppliers and the wider society - and what matters - ethical values, human dignity, social justice, environmental sustainability."
Mr Mayer added he believed measuring success by GDP meant little in terms of the real economy, but purely spoke on financial terms.
The Transparency Task Force event marked the 10 year anniversary of Lehman Brothers' collapse and addressed how the financial sector could reduce the risk of another economic crisis.
A theme of 'dishonest culture and lack of integrity' was identified throughout the conference as a fundamental issue leading to the 2008 crash and Mr Mayer said he believed this culture and dishonesty was caused by the pressure the economic system put on corporations to produce ever increasing returns over short periods of time.