A public bank is a bank that is controlled by and principally funded by a government body rather than by private investors. In essence, it is an extension of the governing body that created it — state, county, or city government. The governing body for the bank deposits all its revenue, taxes, fees, and other earnings, in the bank. In addition, it can borrow from their bank. The officers of the bank report to a board or commission defined by the charter of the bank so as to ensure freedom from conflicts of interest, commitment to follow sound banking principles, and service to the public interest. Further, a public bank does not pay exorbitant salaries and bonuses, and they have no advertising, no branches, no tellers, or ATMs, and they do not pay commissions or fees, making it very sound financially. .

Public banking is common around the world, particularly in developing and newly-developed countries. Globally, about 20 percent of banks are publicly owned. The countries with public banks mostly survived the Great Recession of 2008.

Public banking has also played an important role in America’s past. The U.S. Post Office ran the Postal Savings System from 1911 to 1967. This brought affordable banking services within reach of all Americans. There is currently a movement to reinstate a Post Office Bank — to allow the growing number of unbanked Americans access to banking services.