Public Banking in New Hampshire

Assessing the Possibility of Establishing a State Bank
PRS Briefs
PRS Policy Brief 1516-03
Friday, March 18, 2016

The possibility of establishing a public bank may offer an opportunity for New Hampshire to exercise more control over its finances, and may offer an opportunity for a public sector institution to fulfill public needs that the private sector cannot or will not adequately meet. This report examines New Hampshire’s capital needs, current state funding mechanisms, and the potential costs and benefits of a public bank, to assess whether or not a public bank better meets New Hampshire’s financial needs than current institutions and financing arrangements.

We find that existing public and private sector services are likely to sufficiently meet the state’s financial and capital needs. Furthermore, establishing a public bank may not necessarily introduce interest payment savings or increase the availability of loans but may instead increase state expenditures. New Hampshire’s broad landscape of quasi-public lending institutions and partnerships with local banks offer municipalities, small businesses, and individual borrowers a wide variety of avenues for accessing capital. These lenders leverage their specialized functions to work directly with borrowers to meet their needs. Our research shows that the work of these existing quasi-public institutions could be expanded on an individual basis to better meet state needs, rather than consolidated into a public bank.