Artificial Intelligence and Smarter Living — The Conquest of Complexity: Papers from the 2011 AAAI Workshop (WS-11-07)
Making Cities Smarter than Their Bankers
Bruce B. Cahan, Esq.
CodeX Fellow, Stanford University Center for Legal Informatics | Ashoka Fellow – Social Investment Entrepreneurship
President, Urban Logic, Inc. (a New York nonprofit, qualified in California)
bcahan@urbanlogic.org
show buyers and tenants the cost of owning or renting urban space. Government budgets are available online, with
crime rates, public school rankings, land use/environmental
impact reports and other information readily available for
anticipating city quality of life risks and threats for comparison to like-sized cities. And banks compete directly
and through intermediating online brokers for home mortgages, car, credit card and other customers.
Abstract
As complex organisms, modern cities monitor their financial health and longevity, like Olympic athletes and hospital
patients. The banking system encircles and ensnares people,
buildings and environments defining cities, credit rating
some higher, no matter their quality of life, disaster mitigation, infrastructure buffers or exposures. This paper explores
technologies for smart cities to use the banking system to
better advantage, through more coherent measures, innovation policies and incentives for livability. Municipal banking, credit ratings, sustainability bonds, crowd-sourcing and
crowd-funding solutions for smart cities are also discussed.
Reconnecting Banks with Urban Finance
The 2008-10 Credit Crisis and rolling state, county and
sovereign debt destabilizations prove that what banks finance or refuse to finance, to whom and on what terms,
can revive or wreak havoc on regional economic, social,
environmental and geopolitical stability.1
Herein lies the disconnect: No matter how sustainable or
transparent the city, its municipal bond rates reflect no discount.2 No matter how sustainable the family’s lifestyle, its
mortgage, taxes and other costs reflect no discount. No
matter how much consensus a neighborhood reaches to
save energy, combat crime or feed and house their homeless or “working poor” so as to reduce their hospital,
school, crime and social services costs, the neighborhood’s
tax rate earns no discount. And certainly no dynamic
mechanisms automate awarding, monitoring or withdrawing the discount as local efforts ebb and flow meriting it.
Can smart livable cities leverage their banking? Can
Urban Finance: Old School
Cities contextualize how people own, use and finance assets there. Home prices and vacancy rates reflect (1) physical, environmental and neighborhood assets (amenities),
(2) expected mortgage and tax rates and other costs of
ownership (total cost of ownership, TCO) and (3) expected
resale prices (future value). Commercial real estate adds
(4) the uncertainty of lease rental rates for business cycles,
(5) idling costs of vacant space, and (6) operating cost inflation, so as to maximize the building’s total net revenues
and competitiveness. Governments own and manage a
portfolio of assets (streets, schools, parks, airports, hospitals, city halls, courts, police stations) that attract city
dwellers who pay the taxes that pay interest on bonds that
finance the city’s operating and capital budgets.
Years ago, the maze of a city’s credit rating, debt service, bond refinancing, self-insurance for its operations
(think plaintiffs’ slip-and-fall jury awards), costs of extreme events (such as natural and manmade hazards), tax
rates, and intergovernmental transfers from state and federal governments, was a byzantine financial alchemy few
knew or cared to explore. Taxes were taxes, and how they
came to be so was simplified to citing the number of city
public high school graduates who finished college. How
banks financed city life went unseen as urban finance.
1
Nouriel Roubini [1] and other noted economists suggest that the recent
uprisings in North Africa trace to rapid increases in oil and resulting food
prices. Thus, urban farming and indigenous food supply offer “food security” for cities with the natural or innovation assets to harvest food.
2
Municipal bond buyers and credit rating agencies have yet to quantify
municipal sustainability. While some municipal projects may be rated or
sold for their attractiveness to sustainable investors, overall municipal
sustainability credit ratings and methods are in their infancy. Contrast,
VanScoy 2009 [2] with Leurig 2010 [3].
Government Accounting Standards Board (GASB)’s Statement No. 49
[4] addresses pollution remediation liabilities, after-the-fact. Accounting
and Financial Reporting for Pollution Remediation Obligations. GASB
Statement 42 [5], Accounting and Financial Reporting for Impairment of
Capital Assets and for Insurance Recoveries (November 2003) creates little incentive to replace less-energy or environmentally efficient capital assets, unless the replaced assets were functionally impaired and the replacement cost is less than the impairment charge. GASB Statement 34
[6] rules for infrastructure accounting indirectly may encourage cities to
report operating budget savings through capital asset replacements and
technology innovations that extend the infrastructure system’s useful
lives.
Urban Finance: Today
Today, urban finance is a game, where players succeed
through literacy, transparency and practice. Home prices,
tax assessments and trends are online. Real estate listings
Copyright © 2011, Bruce Cahan and
(www.urbanlogic.org). All rights reserved.
Urban
Logic,
Inc.
2
they mitigate global banking shocks? Can online sensors
and artificial intelligence technologies change how banks
rate city neighborhoods and their collateral value? What is
and grows a “smart city?”
changing functionality, and reduce the risk of government
stand-alone systems. Visualizing and aligning RFP procurement patterns would encourage citizens, fiscal watchdogs, agency contracting officers, companies and nonprofits to propose innovations that stretch city budgets by increasing social returns on investment. With leaner procurement, banks would buy a smart city’s bonds at a premium, because its operating and capital costs decline from
the efficiencies, and earn the city better credit ratings.
As government auction, gift and de-accession programs
(even via eBay®) prove, cities can buy too much of what
they no longer need or what wasn’t the best bargain, technologies that won’t work with existing or planned interoperability purchases or “upgrades,” and then stuff old stuff
in unproductive warehouse space to shrink from breakage,
theft, obsolescence or decay. What if cities banded together
to create their own version of GroupOn®, with all the public bidding protections that decades of commonsense, sunlight law fairness and conflict of interest disclosure experience suggest? Everything from energy4 to prescription
drugs5 have bulk procurement programs, what if a cooperative grouped multi-city/multi-agency buying power to
grow the market for more products that improve urban sustainability? Conversely, what if instead of RFPs leading
technology standards, cities deliberately lagged, using better impacts feedback, perhaps through more fine-grained
sales tax rates, so that products (like hybrid cars) priced by
the market as saving on energy, were awarded higher rankings in government procurements.
Smart Cities and their Technologies
Imagine windows automated to close or shade in the summer cooling season and let in the sun’s heat during the
winter. The intelligent windows smooth spikes in air conditioning, reducing utility investments in standby generators just to cool a few peak summer days, thus strengthening the city’s electric utility and keeping the city’s energy
rates lower. Such smart windows should reduce utility
bills, mortgage interest rates or property taxes.
Sadly, as Philip Howard of Common Good [7] notes,
government agencies have evolved to resist and impede
commonsense efficiencies. What if a city rewired its agencies and utilities to leverage technology-assisted behavioral
patterns and impacts? With so many devices web-enabled
to generate terabytes of urban data, a smart city would use
the sensor technologies to improve urban livability daily.
A Privacy Caution and Niche
Government use of citizens’ pattern-recognized digital
lives poses privacy and civil liberties concerns. If one
house sets its thermostat a few degrees lower overnight
than the neighbors, does the utility or its marketing affiliate
bombard the sleeping green citizen with 20% off coupons
for blankets in an unwelcome coincidence of inevitable
consequence?3 Can the data on behavioral patterns, once
captured as footprints on digital sands, remain private or
accessible only for its originally intended use?
Smart cities that enhance privacy by adopting a “we
won’t spam you” citizen identity data anonymity policy
may find a special niche as alcoves for living ad-freer!
Smart Cities Use Their Clout With Bankers
Assume that the major questions for building a smart city
were asked and answered, how would having a smart city
change the dynamics of bank negotiations, function and
systemic safety? Are smart cities better credit risks, and in
the event of fiscal, manmade or natural hazard shock, can
loans to smart cities be refinanced easier? The answers depend on making banks compete for city business.
Major cities differ widely in their banks’ competitiveness. Federal antitrust statistics use the concentration of
deposits held by the largest banks, as an index to assess
competitiveness.6 Ann Arbor Michigan scores 852 and San
Francisco scores 1869, meaning that not only is San Francisco’s banking less than half as competitive, it’s nearly
monopolized (over 1800) following a succession of bank
failures, mergers and acquisitions.7 When just a few banks
control urban finance, cities, companies and citizens enjoy
Optimizing Smart City Procurement
Cities are bulk procurement machines, they buy for thousands of people, programs, buildings, classrooms, acres,
road miles and other municipal necessities and amenities.
Government requests for proposal (RFPs) encode procurement specifications that either (1) specify pet technologies with a predestined successful bidders cartel, or (2)
define interoperable functions and standards that shift
whole industries to adopt changes in product manufacturing and features, so as to speed iterative product life cycles.
Public bidding processes generate a disconnected digital
babble of government shopping lists - procurement data
that a smart city would mine to approach vendors, innovation labs and intergovernmental and public-private partners
to reduce overall costs, upgrade technology or fast-
4
New York State Department of Environmental Conservation, Municipal
Low-Energy Policies How-to Lower Energy Intensity in Municipal Activities, http://www.dec.ny.gov/energy/57119.html, describing intergovernmental bulk energy, computer and other purchasing options.
5
National Conference of State Legislatures, Pharmaceutical Bulk Purchasing:
Multi-state
and
Inter-agency
Plans,
http://www.ncsl.org/default.aspx?tabid=14464#NMPI, describing various
consortia through which states buy prescription drugs in bulk.
6
CASSIDI [8]
7
CASSIDI [9]
3
Governments already sell lifestyle data. U.S. Postal Service Change of
Address filings and new car and driver registrations with state Departments of Motor Vehicles trigger marketing solicitations for insurance,
home goods and direct mail advertisers products and services.
3
limited bank choices, raising their loan interest and fees,
and giving bankers market power to limit credit access and
refuse to restructure loans when the bank’s underwriting is
stress-tested by business cycles of recession and expansion.
Smart cities try to reduce exposure to banks’ business
cycle risk. As Figure 1 shows, wartime business cycles historically yield more expansion months, but recent business
cycles – including the current recession – defy economic
and social buoyancy through war-making. Clearly, cities
can’t use war-making to moderate the cyclical threats to
their economies or banks.
Cities are valued bank customers - as local comptroller’s
reports and campaign finance contributions by banks and
bankers show. In April 2007 at the beginning of the subprime mortgage crisis, New York City (NYC) [10] noticed
that a lack of access to full service bank branches aligned
closely with community calls to city agencies for help in
preventing mortgage foreclosure and resulting neighborhood blight. The City used its modest clout as customer8 to
force its major banks to restore full service branches.
Using a city’s clout as bank customer could instigate
bank innovations that enhance smart city programs and behavior patterns. But that requires a city finance manager to
see and effectively align operational program benefits and
strategies across city agencies and agendas, unleashing radically fast collaborations. Consider a chief information officer for an Environmental Protection Department who
convinces colleagues in the Real Property Assessment,
Buildings and Land Use Departments to align procure-
ments to enjoy the shared perspective and savings of interoperable geospatial information systems (GIS) across
the city’s stakeholders in public and private sectors.
Mapping What Cities Need Where
Geospatial intelligence applications promote smart city
thinking. The next sections describe examples of new geospatial tools: sustainable resiliency®, a Three-Layered Map
of the World™ and Economy Mapping™.
Sustainable Resiliency
Every region has a cacophony of experts, championing
metrics that reflect their domain expertise on economic,
environmental, education, health, nutrition, transportation
and other natural, social and built infrastructure systems.
Sadly, the municipal budgeting process – taking cues from
federal budgeting – is terribly inefficient at prioritizing
thematic issues, and weighing innovations for realizing
long-term savings through synergistic investments in mitigation and sustainability.
Post-disaster, hoards of performance benchmarks and
their stewards arrive for humanitarian reasons, but also to
reap the funding of disaster response, usually the most expensive “next disaster mitigation investment strategy.”
What if, instead of post-disaster, a city fused their performance benchmarks into a coherent regional quality of
life index, called sustainable resiliency? Each government
program, business activity and NGO impacting sustainable
resiliency would explain the dimensions of their contributions, as part of simplifying the e-filed or paper ocean of
taxes, permits, budget requests and contract bids. As the
city implemented choices that improved and assured sus-
8
As a percentage of 2007 bank deposits ($379 billion), New York City
government’s $2.3 billion constituted a mere six-tenths of one percent
(0.61%). [11] As of June 30, 2007, municipal bank deposits stood at $2.3
billion, and the City’s portfolio of investments totaled $6.15 billion. [12]
4
tainable resiliency, its credit rating would improve, providing objective market validation of reduced risk and increased municipal efficiency. Cities with rising sustainable
resiliency signal they are becoming cheaper to operate and
manage over time, while cities with declining sustainable
resiliency will face higher operating and capital expense,
foreshadowing larger maintenance budgets, crime rates and
municipal deficits.
Innovative solutions would become coins of the realm:
Transit-oriented development restores inner city vitality,
removing blight, traffic congestion and suburban sprawl.
[13] Replanting mangroves to restore natural capital as
flood protection for 100 years [14] costs less and is more
efficient than building concrete seawalls and levies that
crack in 30 years, only to be replaced at 30-year intervals,
forever. As a differentiated fixed income instrument, municipal bonds rated for their sustainable resiliency impacts
attract impact investors, socially-responsible mutual funds,
and pension fund, insurance, university endowment and
others with mission congruency mandates. In structuring
sustainable resiliency bonds, the issuer (a government
agency in this case) would covenant to regularly report on
how the bonds’ proceeds launched or maintained sustainable resiliency projects. Such reporting would provide valuable smart living impacts data, and could be monetized by
making a bond deferral, discount or other incentive pivot
on timely, accurate periodic impact reports.
SubEx™: An Example of Sustainable Resiliency
Subways carry passengers, but could do more. SubEx
would move small package freight by subway, another
strategy to grow smart city sustainable resiliency.9
In the early 1900s pneumatic tubes10 on Wall Street carried traders’ orders, stock certificates and cash. Proposals
for using subways for hauling freight seemed the next
wave. Wharves along the City’s rivers brought freight that
trucks carried into the city center. Truckers opposed shifting hauling to the railroads operating subways. Today, the
wharves are long gone, and trucks clog highways, bridges,
tunnels and city streets during rush hours.
SubEx would make dual use of subway infrastructure by
pooling FedEx®, UPS® and other overnight courier packages, loading them in bins pre-sorted by office and apartment building addresses, putting the bins on special subway cars, and delivering the packages’ “last mile” by bicycle or eco-friendly transit. Gone would be the added air
pollution, wear on street paving, extra potholes and doubleparking of racing and idling delivery trucks, along with
their congestion adding road rage at peak transit bridge and
tunnel hours. Instead, freight franchise revenues would
help offset the deficits of running a passenger-only subway
infrastructure that is relatively unused at non-peak hours.
Mathematically, adding freight use to 225 route miles of
subway makes NYC’s 49,000 street lane miles and 30 regional bridges and tunnels more efficient and safer, thus
avoiding the cost of building more roads to carry the same
daily commuter plus freight load. [17]
Three-Layered Map of the World
Sustainable resiliency is like a barometer of regional quality of life equilibrium. Needs indigenously known or remotely sensed for health, sanitation and other concerns no
longer depend on outside advocates (NGOs or contractors)
to be seen and solved. Needs objectified by sensors and
prioritized and advocated in local voices are more compelling. Likewise, a global wave of innovations by social entrepreneurs creates simpler capacities for meeting the
needs, more effectively than large scale infrastructure or
centrally-planned solutions that take years to build and finance, create risk of corruption, and are abandoned when
found too hard to operate. Every region has formal and informal budgets – money - allocated by national governments or multinational donors, money that too often is unaccountable once it hits the target country and its elites.
A global map consisting of three layers: needs, capacities to solve needs and money allocated to the region or
need – a Three Layered Map of the World – would empower smart cities and their citizens to discover, adopt and
implement innovations faster, cheaper and autonomously.
Economy Mapping
As municipal assets, slums have negative value: Displaced
there, squatters pay no taxes, but consume municipal services. There the human toll of disaster risk looms large:
deaths, dismemberment, orphaning, disability and lost incomes. Yet, the post-disaster fate of slums persists through
benign neglect. Natural disasters de facto clear slums,
without political or court opposition de jure.
An Economy Map plots a truer value of disaster mitigation, reflecting (1) fiscal costs borne pre-disaster for the
slum’s residents, (2) sustainable resiliency needed to assure
their survival in place or elsewhere pre- or post-disaster,
and (3) ways to reduce impacts of a disaster in the slums
that then radiate out regionally or nationally.
Istanbul straddles the Anatolian and Eurasian tectonic
plates comprising the North Anatolian Fault Zone, creating
frequent risks of earthquakes and tsunamis. The 7.4 Izmit/Kocaeli Earthquake of August 17, 1999, killed 17,127
people, injured another 43,959 and structurally weakened
120,000 buildings. The magnitude 7.5 earthquake in Istanbul expected by 2040 would kill 50,000, damage 40,000
buildings and cost upwards of $11 billion. [18, 19] More
than 40% of Istanbul’s 12 million residents live in informal
settlements (slums) non-resilient structures. 50% of Istanbul’s government sponsored enterprises (GSEs) revenues
comes from gas pipelines, [20] some running under inadequate slums built along seismic fault lines, that would collapse post-earthquake, vanishing such revenues for a time,
and in turn, jeopardizing the 40% of Turkey’s sovereign
debt rating tied to Istanbul’s. Thus, disaster mitigation of
slums might insulate sovereign ratings.
Mitigating Istanbul’s gas pipeline slum vulnerability is
9
SubEx was a finalist in the 2009 Buckminster Fuller Design Challenge.
[15] A parallel concept is being piloted by City transit and state energy
agencies.
10
Pneumatic tube freight transit has been revived as an energy and environmental strategy. [16]
5
just one benefit monetized on an Economy Map. Pandemic
risks reduced by cleaner legal housing in former slums protect the entire city from disease. Better educational and social infrastructure reduces poverty, crime, terrorism and the
inevitable social instability of have-nots demanding solutions that the wealthy refuse them. Using Economy Mapping, credit agencies can rate municipal bonds higher, saving debt service that the smart city can invest in mitigation.
novators, from web services like Kickstarter [26], let people directly fund new businesses and solutions they believe
in. A smart city would create an investment fund to match
public-private funding of crowd-sourced solutions to speed
adaptive innovation.
Social Capital & Complementary Currency
Improving slums and fragile neighborhoods and restoring
urban economic growth requires smarter financial and social capital. Better rated, lower interest sustainable resiliency bonds and local business borrowing and insurance
rates, as described above, save financial capital.
A parallel currency – the social capital of neighbor helping neighbor - is abundant everywhere. Habitat for Humanity [27] and Mexico’s Patrimonio Hoy [28] sweat equity
initiatives teach homeowners and neighborhoods to rebuild
stronger, safer houses. Typically, construction industry
partners contribute time, materials and skills training to the
project, making tangible their humanitarian concern and
“good neighbor” commitment.
Every home fix-up project does not need a new drill,
paint sprayer or special linoleum installer’s tools. How
many hammers, wrenches and screwdrivers sleep idly in
tool chests? Using web-matching services like NeighborGoods [29], smart cities would encourage citizens (especially moderate income, student, immigrant and elderly
populations) to lend and borrow, rather than buy, the tools
and know-how needed to rebuild their housing, start a
business or reinvigorate their community infrastructure.
Clueless as to how to reinstall a double-pane window, or
start advertising your new business on the web? Services
like TimeBanks [30] let citizens find an hour from citizenmentors willing to share their expertise. At some exchange
rate, Time Bank credits would cost the smart city less than
sending city work crews or contractors to rebuild the housing, or pay jobless benefits to budding entrepreneurs. Such
exchange could be effected as tax credits, merchantsponsored coupons or discounts, free movie or museum
admissions, or other forms of complementary currency that
publicly dignify and reward civic behaviors. [31] Complementary currency flows abundantly in smart cities.
Smart Businesses Like Smart Cities
Corporations embrace sustainability, for brand enhancement and employee satisfaction. They attract conscious
consumers, socially-responsible investors, and government
contracts, grants and tax incentives for “clean energy,”
“pollution abatement” and other progressive activities.
Through ISO 9000 and 14001 certifications, and emerging
industry standards (e.g., LEED® for green buildings and
ENERGY STAR® for electronics), corporate manufacturing processes are improving energy, environmental and
transportation efficiencies. Independent reports (e.g., the
Carbon Disclosure Project [21) make the public aware of
corporate sustainability practices.
With global insurance losses and premiums rising, businesses seek to control insurance costs for property, casualty, business interruption and healthcare. Climate change
flood risks forecast for desirable coastal and waterfront cities require city managers to design and clearly explain proactive strategies for mitigation. Seismically-active regions
exposed to earthquake or tsunami flooding are especially
prone to insurability disadvantages. Prudent corporate risk
managers seek urban collaborations.
Smart cities that attract triple bottom line companies
(profit, planet, people) find corporate balance sheets willing to match local funding for multi-dimensional sustainable resiliency projects. State bond banks and county/local
economic development bond programs can provide taxexempt funding for corporate investments that upgrade
sustainable resiliency. As corporate social responsibility
(CSR) ratings drive employee and management involvement in local quality of life issues, corporate human and
institutional resources become allies in improving neglected neighborhoods, schools and other challenges.
High-Transparency Banks, not Ostriches
Crowdsourcing Urban Solutions & Funding
Banks are the air traffic controllers of urban lifestyle data
Peet’s Coffee sells a latte and swipes payment from a credit card. A contractor buys supplies at Home Depot to green
the local Peet’s store, using a credit card. A manager pays
the tuition by bank transfer for his employee’s high school
equivalency class as a job benefit. Millions of such transactions flow daily through the digital channels of bank operations. Bailouts of predatory Industrial Age banks left their
knowledge of community impacts camouflaged, and their
marketing-by-demographic-profiling intact.
Imagine a high-transparency ethical bank, GoodBank™(IO), built for the Information Age, that gives cus-
People congregate in cities for the planned and random
power of synergies catalyzed there. Silicon Valley companies owe much of their success to such synergies.
Smart cities sponsor and leverage online communities
built for crowdsourcing and funding solutions. For instance, Challenge.gov [22], OpenIDEO [23] and OpenAction [24] identify intractable issues, and encourage stakeholders to pool solutions. Crowd-funding11 for a city’s in11
Federal and state securities law barriers are being challenged so as to
improve the job-creating capacities of crowd-funded small to medium
sized enterprises. [25]
6
tomers constant feedback as to the regional, environmental
and social impacts of saving, spending, investing, borrowing and donating. [32, 33]12 The bank as community would
reflect sustainable resiliency impacts in clients’ relationship pricing and as its CSR. By living financial lives truer
to their ethical goals, customers reconnect meaning and
money, earning complementary currency rewards. Enhanced social financial literacy and behavior could improve systemic bank safety and soundness. Hightransparency banks quantify impacts, so they align smart
city empowerment strategies in enduring and new ways.
ready audience of local investors.
Conclusion
Smart cities can use sustainability and resiliency innovations to recast their banking and credit options. The uncertain longevity and ownership of banks, large and small,
suggest that cities create a range of financial allies at local
levels, and reconceive their credit quality proactively.
Business cycles challenge banks’ appraisal and underwriting assumptions. Regulators often merge unhealthy banks
into larger banks. The monopolization of local banking
hurts people and businesses, impacts that smart cities as
bank customers can reverse. The shift from predatory
banking in the Industrial Age to high-transparency banking
in the Information Age would leverage innovations and data available in abundance to smart cities.
Publicly-Owned Banks
If the bankers fail to fairly value a smart city and its citizens and businesses, the city could buy or form a bank.
The history of government-owned banks is fairly thin
and distant. Private sector banks seem as evolutionarily inevitable as the air we breathe. The United States and its
major trading partners have (or had) banks wholly or partially owned by government. [34] Whether public or private banks navigate the ups and downs of business cycles13
better is beyond the scope of this paper.
Cities and their networks of people, businesses and infrastructure generate bank deposits. They require loans independent of the business cycle (regionally/nationally) and
independent of bank risk-taking elsewhere. Loans and other financial services in smaller cities should not become
more expensive or vanish as (1) international regulations
require “Too Big To Fail” money center banks [36] to post
higher reserves [Basel III 37], or (2) the Federal Deposit
Insurance Corporation imposes higher deposit insurance
premiums to replenish its depleted fund. [38] Major banks’
disregard for local economic development, housing equity
(mortgage access), education (student loans), farming (agriculture) and other capital needs historically justified
forming publicly-owned banks (e.g., The Bank of North
Dakota that still exists.) [39, 40]
Healthy banks thrive through constant adaptation. Publicly-owned banks also must master political adaptation.
When well-managed, such banks assure competition in a
region whose private banks are too small or at competitive
disadvantage in acquiring funds to lend to their customers.
If a smart city’s banks delay rewarding its sustainable
resiliency advantages appropriately, if its banks merely
credit-rate the city by outmoded measures designed to ignore or retrospect vulnerabilities, then the city might be
well served to form a bank. Such bank, if styled as a bankers’ bank, could improve the competitiveness of regional,
smaller banks, while serving as “local Federal Reserve” to
insulate the city and its residents from the systemic risks
and periodic failures of larger national/global banks. Alternatively, the city’s bank could offer investment banking to
make a market in sustainable resiliency bonds, salable to a
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14
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7
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