The 'Socialist' Bank Thriving In Trump Country
An independent exercise, not a statement by the video creator or verification of every claim in the video.
A large deposit base is different from equity that absorbs losses
In a simplified hypothetical balance sheet, not an actual bank, assume assets of 100, liabilities such as deposits of 90 and equity of 10. Recognizing an unrecoverable asset loss of 5 with no other changes leaves assets of 95, liabilities of 90 and equity of 5. A 5% asset loss therefore reduces equity by 50%. Public ownership or deposit backing does not remove this arithmetic, so examine problem assets, allowances, capital capacity and guarantee exposure rather than deposit size alone.
Check for yourself
- Is the support a loan, a bond purchase or a grant?
- Has loss-absorbing equity been distinguished from repayable liabilities?
- Does transferring earnings to the state leave sufficient capital and liquidity?
Limits of application
This unitless hypothetical book-value calculation is not BND’s actual condition or a loss forecast. Allowance timing, taxes, collateral recoveries, other income and risk-weighted assets are omitted, so it is not a regulatory capital-ratio calculation, and a loss does not automatically imply a state cash injection.
- What to look for
- Follow the power-plant transaction and local lending to understand how a publicly owned bank connects funding, financing tools and policy goals.
- Why it matters
- Distinguish deposits from equity, loans from grants and state backing from federal deposit insurance, while weighing preserved jobs against credit, fiscal and environmental costs.
Timeline
4 segmentsThe closing discussion considers political oversight and proposals elsewhere, emphasizing the need to establish funding and earnings first. Democratic ownership does not remove credit risk or guarantee project success; policy effects must be assessed alongside repayment, capital retention and potential state exposure. North Dakota’s long operating history does not guarantee replication elsewhere, and preserved jobs do not establish that environmental or alternative-investment costs have been offset.