Virgin Community Bank

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As part of their competition, which is open until April 17th,Virgin Unite have been asking you to submit your 'Screw Business as Usual' ideas. In this guest blog Tarik explains his idea...

It is estimated that the 1997 Asian Financial Crisis resulted in a loss of 6% of global GDP, 10M unemployed and 50M pushed below the poverty line. The 2001 Global Technology Stock Market Collapse resulted in US$5 Trillion lost market value followed by massive layoffs. It was corrected by dropping interest rates and freeing up credit that ended up fueling the housing and global financial crash 7 years later, this collapse resulting in an estimated US$16 Trillion in global losses in the first 2 years alone, according to Bloomberg, with the European Debt Crisis still to follow.

These numbers are incredibly real. They are devastating personal and social losses: Lost jobs, closed businesses, lost homes, lost savings, collapsed communities - with the hardest hit being those who can least afford it. According to the National Bureau of Economic Research, in 2010 the worlds poorest 20% received 1% of GDP and the middle 60% just 13%. Youth unemployment is sharply up, as well, according to the IMF, including over 50% in South Africa and Spain in 2010.

A common thread to all modern financial collapses is interest-based financial instruments proliferated by over-leveraged institutions. Despite the view of many modern economists who agree that interest- and fractional reserve lending-based systems are detrimental to a stable economy, result in unemployment, inflation, environmental destruction, and enrichment of the wealthy at the expense of the poor, the accepted answer to these crisis seems to consistently be lower interest rates, more cash!

Mainstream global banking and financial institutions, in their quest for ever-faster and larger profits, have convinced the masses that interest-based, low reserve lending is the best financial model. Regardless of growing evidence to the contrary increasingly volatile and severe economic crisis, increasing global unemployment and poverty, and massive environmental impacts the world continues to generally pursue these same financial practices that have gotten us into such a precarious position.

This is an unbelievable opportunity to Screw Business as Usual. Partnering with Virgin Money, Virgin Community Bank would provide community-based, no-interest, high reserve lending, project partnering and financial services to the worlds consumers, entrepreneurs and small businesses and turbo charge the engines of growth and prosperity! Well build a network for sustainable development and prosperity from the ground up, inducing global collective improvements, in the process! Thank you Richard Branson and Virgin Unite, for allowing me and my fellow SBAU submitters the platform to share our ideas for truly changing the world and Screwing Business as Usual!

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