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LETTERS

A public bank would bring benefits to Mass.

A new Chase Bank branch opened in Mattapan Square on Blue Hill Avenue last year.Jonathan Wiggs/Globe Staff

Re “Is the time right for a state-owned bank?” (Business, April 28): I appreciate Jon Chesto’s commentary about the proposal for a Massachusetts public bank, and I want to counter some misunderstanding about how the bank would operate arising from comments made by Kathleen Murphy, president and CEO of the Massachusetts Bankers Association.

First, funds would not be transferred to the public bank from private banks. State deposits would be transferred from the Massachusetts Municipal Deposit Trust, a private fund that invests around the world.

Second, the public bank would not compete with private banks. It would make its loans by participating with Massachusetts private banks and community development financial institutions.

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Third, the mission of the public bank is to provide affordable financing to borrowers who are not currently served by commercial banks. The Boston Foundation reports an unmet demand for capital of $574 million annually among entrepreneurs of color. Women and farmers also would benefit. And our municipalities, particularly Gateway Cities, would no longer be solely dependent on the difficult bond market.

Fourth, the public bank would complement the important work of quasi-state financing agencies by participating in loans with them and by providing lower-interest funds, bringing down the total cost to the borrower.

A public bank would bring enormous benefits to Massachusetts.

Douglas Cliggott

Provincetown

The writer, former managing director and chief investment strategist at J.P. Morgan & Co. and JPMorgan Chase, is an advisory committee member of the Massachusetts Public Banking Coalition.