For example, in the US we have profitable industrial firms where management complains that finance is available for expansion in China, but not for domestic manufacturing. Companies can issue bonds, and then use the capital at their leisure. And the US financing system is based on bonds, not bank lending.
Why not a system where if you pass the basic credit scores and some panels of independent risk assessors, you can get a government loan? Because then you force people to take on risk they do not want. If you want to be a lender, buy shares in a bank. Or start one. The history of state-owned banks, and especially their risk management, is a sorry tale, at least in this country. When banks suffer credit losses, they fall squarely on the private owners, unless you have a corrupt political system. But then, the corruption is the problem.
What is the value that the private banking system adds? Transfering risk-averse savings into risky projects, without exposing the tax-payer to risk. And it has after all worked extremely well.
As for the credit union problem: In a system dominated by huge corporations that preferentially deal with each other, everyone else gets shut out. IKEA does not want to negotiate with 20 little banks when it can work with 2 giant ones and similarly, Citibank prefers to do megadeals with IKEA than with Ingmar's Eco-Friendly Furniture Craft. There will still be room for credit unions, even if they have a small market share in the big corporate segment. Furthermore, I suppose you could merge credit unions into megacredit unions, if they wanted to serve the needs of big corporate customers.
To me also, public is not enough - it must be public, open, and democratically accountable. Otherwise, those who are connected soon appropriate it. The Swedish experience, not only with banks, but with all state-owned companies, is that the more open, democratic etc they are, that is, the less like ordinary companies they are, the less successful they are. Rule one is that politicians must never meddle in the business of the state-owned companies. They name the boards, who name the management, who executes policy. If the state is unhappy, it changes laws or fires boards. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Companies can issue bonds, and then use the capital at their leisure. And the US financing system is based on bonds, not bank lending
Bond issuing is not quite as simple as that- and banks control the gateway. Imagine trying to sell a bond without Wall Street underwriters or the approval of raters. And neither of those groups is particularly rational or well informed.
As for credit unions, that's a theory, but the actuality is that it does not happen.
I suspect that things in a small, relatively homogeneous country with a single center may not be similar to how things work in the USA.
