What Will Banks Look Like When This Crisis Is Over?

By Peter Atwater, Minyanville

Over the past several years, I have experienced more than a few eye rolls from my answer to this question asked by bankers: "What do you see ahead for financial institutions?" As I see it, by the time this crisis is over, the new model for banking will be very local, mutually owned, community-driven organizations -- institutions akin to the building societies and savings-fund societies of the 1800s.

As you might imagine, the responses from today’s bankers are filled with words like "inefficient," "impractical," and "cost-prohibitive" if not "outright ridiculous." The vision I see is so far away from the current transnational banking model that exists today as to be unthinkable.

Today’s bankers still live in their extreme “us, everywhere, forever” world, while the world I watch is moving rapidly to “me, here, now.” For what is ahead, “local” and “community” matter.

What brought all of this to mind this week was an email from my brother about the fact that the community of Barnard, Vermont, was coming together to try to raise $500,000 to buy their local general store. As a kid, we had camped at nearby Silver Lake State Park, and to this day I still recall wandering through the store looking for bug spray, dry matches, a candy bar, or whatever else the day’s unexpected need (or want) was. The Barnard General Store had it all somewhere on the shelves.

But it was more than that. Even as an out-of-towner, it was Cheers. Watching the locals, it was a place, as the song goes, “Where everybody knows your name, and they're always glad you came. You wanna be where you can see, our troubles are all the same. You wanna be where everybody knows your name.”

Now I can imagine many Minyanville readers thinking, “Well that’s Vermont, that is definitely not here,” but I wouldn’t be so sure. Communities are already coming together to support locally grown agriculture – CSAs and farmers' markets are booming across the country. And as I noted recently, food preferences are among the best leading indicators of social mood that I know.

In researching the current community-based efforts in Barnard to re-open its store, I discovered that Barnard is hardly alone in its efforts.

Hurricane Irene hit Vermont hard, and local stores across the state were especially hurt. In Guilford and elsewhere, Vermonters are also coming together to support their general stores. (And in the comments section to this article, I’d encourage you to offer other examples that you see of communities coming together to support local businesses.)

Whether or not communities across the country come together in the way Barnard and Guilford, Vermont, are today, only time will tell. But I think they are very significant examples of what is afoot as our preferences turn to local community-driven options.

With all of the uncertainty we feel today, we want to be in a place where everybody knows our name. The people of Barnard, Vermont, are working hard to make sure that happens.

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