WEBVTT 00:00:00.000 --> 00:00:04.639 When you picture the ruthless, profit -obsessed 00:00:04.639 --> 00:00:07.759 machinery of modern global banking, you probably 00:00:07.759 --> 00:00:09.900 don't picture a group of Catholic missionaries. 00:00:10.300 --> 00:00:12.800 No, definitely not. You picture skyscrapers, 00:00:13.080 --> 00:00:14.900 right? High -frequency trading algorithms, that 00:00:14.900 --> 00:00:17.949 relentless pursuit of... maximum shareholder 00:00:17.949 --> 00:00:19.829 return. Right, exactly. You definitely do not 00:00:19.829 --> 00:00:23.390 picture like global justice or charitable missions 00:00:23.390 --> 00:00:25.750 or the integrity of creation. Yeah, those are 00:00:25.750 --> 00:00:28.309 two very different worlds. Totally. But today 00:00:28.309 --> 00:00:30.309 we are pulling from a really fascinating stack 00:00:30.309 --> 00:00:32.670 of source material mainly centered around this 00:00:32.670 --> 00:00:36.090 detailed Wikipedia article to explore an institution 00:00:36.090 --> 00:00:38.670 that just completely short -circuits that assumption. 00:00:38.929 --> 00:00:40.969 It really does. It's called the Styler Bank. 00:00:41.450 --> 00:00:44.149 And our mission for this deek dive is to explore 00:00:44.149 --> 00:00:48.149 how this missionary order basically accidentally 00:00:48.149 --> 00:00:51.570 built a fully regulated, Wall Street -grade financial 00:00:51.570 --> 00:00:54.090 institution. And we really want to unpack the 00:00:54.090 --> 00:00:56.810 actual day -to -day mechanics of what ethical 00:00:56.810 --> 00:00:58.630 banking actually looks like when it's forced 00:00:58.630 --> 00:01:01.590 to operate in the real world. Exactly. OK, let's 00:01:01.590 --> 00:01:04.900 unpack this. Right out of the gate. I mean the 00:01:04.900 --> 00:01:06.819 contradiction in your mind as a listener is just 00:01:06.819 --> 00:01:08.900 almost too massive to ignore It's a striking 00:01:08.900 --> 00:01:11.480 contrast. Yeah, because we're so conditioned 00:01:11.480 --> 00:01:14.579 to view those two concepts like heavyweight financial 00:01:14.579 --> 00:01:17.560 infrastructure and selfless charity as Fundamentally 00:01:17.560 --> 00:01:20.599 opposed right like oil and water exactly. Hmm 00:01:20.780 --> 00:01:23.019 But what we're looking at today isn't just some 00:01:23.019 --> 00:01:26.620 quirky historical anomaly. It's genuinely a master 00:01:26.620 --> 00:01:30.040 class in organizational design. It's this blueprint 00:01:30.040 --> 00:01:33.400 of how an entity can take the incredibly strict 00:01:33.400 --> 00:01:36.780 notoriously cold mechanics of the financial system. 00:01:37.409 --> 00:01:40.349 and, well, reverse engineer them to fund global 00:01:40.349 --> 00:01:43.329 aid. Which is wild. And to understand how a machine 00:01:43.329 --> 00:01:45.469 like that operates today, we first have to look 00:01:45.469 --> 00:01:47.469 at the completely accidental and honestly kind 00:01:47.469 --> 00:01:49.510 of hilarious reason it was created in the first 00:01:49.510 --> 00:01:51.349 place. Yeah, this was definitely not born out 00:01:51.349 --> 00:01:53.629 of some grand ambition to conquer the financial 00:01:53.629 --> 00:01:56.030 markets. No, not at all. The origin story is 00:01:56.030 --> 00:01:59.689 rooted purely in the rigid mechanics of regulatory 00:01:59.689 --> 00:02:04.140 compliance. So it's December 1963. And the Styler 00:02:04.140 --> 00:02:07.159 missionaries, they have this very simple informal 00:02:07.159 --> 00:02:09.539 system going. Right. People in their community 00:02:09.539 --> 00:02:12.680 trust them. Right. Sure. So individuals are just 00:02:12.680 --> 00:02:14.520 giving the missionaries their savings to hold 00:02:14.520 --> 00:02:16.979 on to. The missionaries hold the capital, and 00:02:16.979 --> 00:02:19.500 they use the interest generated from those funds 00:02:19.500 --> 00:02:22.080 to pay for their charitable work around the world. 00:02:22.280 --> 00:02:24.919 So it's just this highly efficient closed loop 00:02:24.919 --> 00:02:27.879 system of mutual trust. Exactly. It worked great. 00:02:27.939 --> 00:02:31.139 Until the government notices. Right. Always happens. 00:02:31.580 --> 00:02:34.960 Fast forward to 1964, and the German banking 00:02:34.960 --> 00:02:38.080 authority, the Bankenoffzicht, they just step 00:02:38.080 --> 00:02:40.500 in and suddenly shut the whole operation down. 00:02:40.960 --> 00:02:42.479 Yeah, they essentially tell the missionaries, 00:02:42.919 --> 00:02:45.819 look, you are acting like a bank without legally 00:02:45.819 --> 00:02:48.580 being a bank. Which, I mean, we have to understand 00:02:48.580 --> 00:02:50.979 why a regulator would do that, right? Oh, absolutely. 00:02:51.139 --> 00:02:53.259 The German regulatory environment is designed 00:02:53.259 --> 00:02:56.639 specifically to prevent shadow banking. You can't 00:02:56.639 --> 00:02:58.680 just take in entrusted funds from the public 00:02:58.680 --> 00:03:01.139 and harvest the yield without any oversight. 00:03:01.340 --> 00:03:03.379 Because when you hold someone else's money, you're 00:03:03.379 --> 00:03:06.919 introducing systemic risk. Exactly. The Bankanoff 00:03:06.919 --> 00:03:10.680 sect, they require proper licensing. They want 00:03:10.680 --> 00:03:12.919 mandatory capital reserve ratios so you don't 00:03:12.919 --> 00:03:15.599 have bank runs, and they demand strict auditing. 00:03:15.800 --> 00:03:19.240 They were basically saying trust is not a substitute 00:03:19.240 --> 00:03:22.039 for compliance. Right. The state doesn't care 00:03:22.039 --> 00:03:23.740 how trustworthy you are. They care about the 00:03:23.740 --> 00:03:26.740 paperwork. Which is just... I mean, that's like 00:03:26.740 --> 00:03:29.060 being told you don't have the proper permits 00:03:29.060 --> 00:03:31.280 to run a neighborhood bake sale, so you respond 00:03:31.280 --> 00:03:33.699 by incorporating a multinational bakery chain. 00:03:33.800 --> 00:03:35.819 That's a great way to put it. Because they didn't 00:03:35.819 --> 00:03:38.319 just apologize and hand the money back. No, they 00:03:38.319 --> 00:03:40.520 went and founded their own official bank. February 00:03:40.520 --> 00:03:43.960 1964, they opened the doors to the Styler Mission 00:03:43.960 --> 00:03:47.620 Spare Institute St. Augustine GmbH. A full -fledged 00:03:47.620 --> 00:03:50.460 limited liability company. Right. But I have 00:03:50.460 --> 00:03:52.740 to push back here, because why take on that massive 00:03:52.740 --> 00:03:54.699 headache? I mean, dealing with capital reserve 00:03:54.699 --> 00:03:57.479 ratios and federal auditors, that requires a 00:03:57.479 --> 00:03:59.680 massive administrative lift. It's a huge burden, 00:03:59.819 --> 00:04:01.800 yeah. So why didn't they just partner with an 00:04:01.800 --> 00:04:04.219 existing already regulated commercial bank to 00:04:04.219 --> 00:04:06.650 hold the money? money, you know, let someone 00:04:06.650 --> 00:04:09.669 else do the paperwork. Well, if we connect this 00:04:09.669 --> 00:04:14.050 to the bigger picture, you actually see the brilliant 00:04:14.050 --> 00:04:17.050 pragmatism in their decision to build it themselves. 00:04:17.089 --> 00:04:19.389 How so? Because partnering with a third -party 00:04:19.389 --> 00:04:21.970 commercial bank would have meant surrendering 00:04:21.970 --> 00:04:24.649 control over the two most important levers of 00:04:24.649 --> 00:04:28.050 their whole operation. The yield. and the ethics. 00:04:28.350 --> 00:04:31.629 Ah, I see. A commercial bank is legally obligated 00:04:31.629 --> 00:04:34.670 to extract a significant cut of that interest 00:04:34.670 --> 00:04:37.589 to pay its own shareholders. Right. So that drains 00:04:37.589 --> 00:04:39.449 funds directly away from the mission. And the 00:04:39.449 --> 00:04:41.610 commercial bank controls the principal. Precisely. 00:04:41.949 --> 00:04:44.589 A mainstream bank is going to invest that entrusted 00:04:44.589 --> 00:04:46.769 capital wherever it gets the highest return. 00:04:46.990 --> 00:04:48.930 Period. Right. They don't care. They might lend 00:04:48.930 --> 00:04:51.379 that money to an arms manufacturer. or a company 00:04:51.379 --> 00:04:54.339 using exploitative labor practices, which would 00:04:54.339 --> 00:04:56.339 obviously directly violate the ethical values 00:04:56.339 --> 00:04:58.220 of the missionaries. Oh, wow. Yeah, that would 00:04:58.220 --> 00:05:00.879 be a disaster for them. So by taking on the immense 00:05:00.879 --> 00:05:03.839 painful burden of forming their own GMBH, their 00:05:03.839 --> 00:05:06.660 own corporate entity, they retained absolute 00:05:06.660 --> 00:05:09.519 control over both the financial yield and the 00:05:09.519 --> 00:05:11.800 moral destination of the capital. That's brilliant. 00:05:12.180 --> 00:05:14.920 So they turned a regulatory roadblock into a 00:05:14.920 --> 00:05:17.500 permanent, self -sustaining financial engine. 00:05:18.000 --> 00:05:20.519 Exactly. They built the fortress themselves so 00:05:20.519 --> 00:05:22.819 they could control exactly what happened inside 00:05:22.819 --> 00:05:26.089 the walls. Incredible. So they successfully build 00:05:26.089 --> 00:05:28.850 this official bank headquartered in St. Augustine, 00:05:28.850 --> 00:05:31.910 Germany. They even eventually open a branch in 00:05:31.910 --> 00:05:34.550 Austria. Yeah, they expand. But surviving the 00:05:34.550 --> 00:05:38.089 1960s as a newly minted bank requires actual 00:05:38.089 --> 00:05:41.069 customers. And today they aren't just holding 00:05:41.069 --> 00:05:43.230 money for their own internal members anymore. 00:05:43.329 --> 00:05:46.610 They are a public facing institution competing 00:05:46.610 --> 00:05:49.069 for everyday retail customers in the open market. 00:05:49.170 --> 00:05:50.970 Right. They're competing with the big guys. So 00:05:50.970 --> 00:05:53.120 how does a missionary bank pull that off? Well, 00:05:53.120 --> 00:05:55.360 this is where their business model becomes highly, 00:05:55.360 --> 00:05:57.720 highly innovative. Today, they serve roughly 00:05:57.720 --> 00:06:00.899 16 ,000 customers. And the demographic breakdown 00:06:00.899 --> 00:06:04.399 of those 16 ,000 people really reveals how appealing 00:06:04.399 --> 00:06:06.819 this model is, even outside of their immediate 00:06:06.819 --> 00:06:09.019 religious circle. Yeah, the numbers in the source 00:06:09.019 --> 00:06:11.560 material were genuinely surprising to me, because 00:06:11.560 --> 00:06:13.600 you would naturally assume their customer base 00:06:13.600 --> 00:06:16.579 is entirely local Catholics in their immediate 00:06:16.579 --> 00:06:18.800 area. That would be the logical assumption, yeah. 00:06:18.879 --> 00:06:21.839 But only about 25 % of their customers actually 00:06:21.839 --> 00:06:24.399 come from from the Cologne and Bonn metropolitan 00:06:24.399 --> 00:06:27.560 area where they're headquartered. The vast majority 00:06:27.560 --> 00:06:30.980 are spread across the entire German federal territory. 00:06:31.079 --> 00:06:33.379 Heavily concentrated in southern Germany, actually. 00:06:33.620 --> 00:06:35.899 Right, and they maintain a strong international 00:06:35.899 --> 00:06:38.600 presence, too. And the crazy thing is, customers 00:06:38.600 --> 00:06:41.339 do not have to be Catholic. You don't have to 00:06:41.339 --> 00:06:43.579 live in the local archdiocese. You don't have 00:06:43.579 --> 00:06:46.579 to have any religious affiliation at all. which 00:06:46.579 --> 00:06:49.160 distinguishes them significantly from a lot of 00:06:49.160 --> 00:06:51.779 other church affiliated banks. A lot of those 00:06:51.779 --> 00:06:54.500 institutions frequently restrict their client 00:06:54.500 --> 00:06:57.759 base to members of their own specific denomination 00:06:57.759 --> 00:07:01.100 to manage risk or maintain a certain exclusivity. 00:07:01.459 --> 00:07:04.100 But Styler Bank just operates out in the open, 00:07:04.680 --> 00:07:06.939 highly competitive retail banking market. They 00:07:06.939 --> 00:07:09.470 do. And operating in the open market means you 00:07:09.470 --> 00:07:11.370 have to offer competitive financial products. 00:07:11.990 --> 00:07:14.709 Right. The Wikipedia article explicitly notes 00:07:14.709 --> 00:07:17.529 that Styler Bank pays marketable, usual interest 00:07:17.529 --> 00:07:19.629 rates. They have to. Or people wouldn't bank 00:07:19.629 --> 00:07:22.470 there. But think about your own checking or savings 00:07:22.470 --> 00:07:25.189 account for a second, right? If you're a customer 00:07:25.189 --> 00:07:27.949 getting the exact same standard interest rate 00:07:27.949 --> 00:07:30.230 you would get at some mega bank down the street, 00:07:30.910 --> 00:07:33.970 what is the incentive to switch to Styler? That's 00:07:33.970 --> 00:07:37.060 the million -dollar question. The twist is what 00:07:37.060 --> 00:07:39.699 you can do with that yield. The customer actually 00:07:39.699 --> 00:07:43.180 gets a choice. They decide exactly what percentage 00:07:43.180 --> 00:07:45.620 of their earned interest is automatically donated 00:07:45.620 --> 00:07:48.819 directly to the Styler Mission's global aid projects. 00:07:49.240 --> 00:07:51.220 Which span across 70 different countries, by 00:07:51.220 --> 00:07:53.480 the way. So as a customer, you get standard rates, 00:07:53.660 --> 00:07:55.540 but you can just set a slider to give it away. 00:07:55.680 --> 00:07:58.339 But why give it away? Well, this raises a really 00:07:58.339 --> 00:08:00.980 fascinating point about behavioral economics 00:08:00.980 --> 00:08:03.339 and the psychology of philanthropy. Okay, lay 00:08:03.339 --> 00:08:06.120 it on me. Consider the traditional model of charitable 00:08:06.120 --> 00:08:08.920 giving. You earn your salary, it lands in your 00:08:08.920 --> 00:08:11.560 checking account, and then you have to actively 00:08:11.560 --> 00:08:14.279 make a conscious decision to part with that money. 00:08:14.439 --> 00:08:16.199 Right. You have to do your research, pull out 00:08:16.199 --> 00:08:18.199 your credit card, and manually make a transfer. 00:08:18.579 --> 00:08:21.360 Exactly. There is a tremendous amount of psychological 00:08:21.360 --> 00:08:24.470 friction in that process. It feels like a loss. 00:08:24.990 --> 00:08:27.829 You're watching your personal account balance, 00:08:28.329 --> 00:08:30.829 physically decrease on your screen. And avoiding 00:08:30.829 --> 00:08:33.389 that feeling of loss is just a powerful human 00:08:33.389 --> 00:08:36.850 instinct. So what Styler Bank does is bypass 00:08:36.850 --> 00:08:39.230 that psychological friction entirely. Because 00:08:39.230 --> 00:08:41.149 it's automated. Because it's automated, yes. 00:08:41.529 --> 00:08:43.929 But also because by allowing the customer to 00:08:43.929 --> 00:08:47.009 set that slider, automatically donating a percentage 00:08:47.009 --> 00:08:49.850 of their interest yield, they are giving away 00:08:49.850 --> 00:08:51.610 money they never physically held in their hands 00:08:51.610 --> 00:08:54.590 in the first place. Oh, wow. That's a huge psychological 00:08:54.590 --> 00:08:57.009 difference. It really is. You're passively funding 00:08:57.009 --> 00:08:59.610 global aid simply by letting your money sit in 00:08:59.610 --> 00:09:02.529 a secure account. It removes the barrier to entry 00:09:02.529 --> 00:09:05.429 completely, and it democratizes philanthropy. 00:09:05.820 --> 00:09:08.860 That makes total sense why secular or non -Catholic 00:09:08.860 --> 00:09:10.980 clients would flock to the system. I mean, you 00:09:10.980 --> 00:09:14.000 don't have to share their exact theology to appreciate 00:09:14.000 --> 00:09:16.639 the automated ethical utility of the platform. 00:09:17.200 --> 00:09:18.620 Exactly. You just have to like the idea that 00:09:18.620 --> 00:09:21.179 your money is working to, you know, build a clinic 00:09:21.179 --> 00:09:23.519 or fund a school while you sleep without you 00:09:23.519 --> 00:09:25.440 having to lift a finger. It's a very appealing 00:09:25.440 --> 00:09:29.110 pitch. It is. But digging into the nuts and bolts 00:09:29.110 --> 00:09:32.570 of this brings us to a much thornier issue. The 00:09:32.570 --> 00:09:35.090 principal. Right. Because it's one thing to easily 00:09:35.090 --> 00:09:38.509 donate your interest. But what is the bank actually 00:09:38.509 --> 00:09:40.690 doing with the principal deposits to generate 00:09:40.690 --> 00:09:42.429 that interest in the first place? I mean, money 00:09:42.429 --> 00:09:44.629 doesn't just spontaneously generate yields sitting 00:09:44.629 --> 00:09:47.409 in a vault. No, it certainly doesn't. To pay 00:09:47.409 --> 00:09:49.889 those marketable interest rates, the bank has 00:09:49.889 --> 00:09:52.429 to take the principal and invest it out into 00:09:52.429 --> 00:09:55.600 the broader global financial market. Right. And 00:09:55.600 --> 00:09:59.100 this leads us directly into the highly complex, 00:09:59.820 --> 00:10:05.450 notoriously murky reality of ESG investing. social 00:10:05.450 --> 00:10:07.909 and governance funds. Yeah, the source outlines 00:10:07.909 --> 00:10:09.950 that Steyler Bank takes the investment of the 00:10:09.950 --> 00:10:12.110 principal incredibly seriously. They use these 00:10:12.110 --> 00:10:14.490 strict exclusion criteria. Right. Like if you 00:10:14.490 --> 00:10:16.929 deposit your paycheck with them, you have a guarantee 00:10:16.929 --> 00:10:19.169 that your capital will never touch child labor, 00:10:19.669 --> 00:10:21.669 the nuclear industry, or defense and weapons 00:10:21.669 --> 00:10:23.730 manufacturing. They draw a very hard line there. 00:10:24.009 --> 00:10:26.809 And to enforce this, they cooperate with a Munich 00:10:26.809 --> 00:10:30.090 -based agency called Okum Research, and they 00:10:30.090 --> 00:10:32.809 apply something called the Frankfurt Hohenheimer 00:10:32.809 --> 00:10:35.610 Light Fountain. Yes. And the Frankfurt Hohenheimer 00:10:35.610 --> 00:10:38.750 Leitfaden is a critical piece of their infrastructure. 00:10:38.970 --> 00:10:41.409 It's quite a mouthful. What exactly is it? Well, 00:10:41.450 --> 00:10:43.529 it was developed by Johannes Hoffman. And it's 00:10:43.529 --> 00:10:46.070 not just a vague list of corporate greenwashing 00:10:46.070 --> 00:10:48.110 buzzwords, which you see a lot of today. Oh, 00:10:48.110 --> 00:10:52.129 for sure. It's a highly specific, rigorous framework 00:10:52.129 --> 00:10:55.210 for determining what is morally acceptable in 00:10:55.210 --> 00:10:57.860 the financial markets. OK, so how does it work 00:10:57.860 --> 00:11:00.679 in practice? It evaluates a company's impact 00:11:00.679 --> 00:11:03.539 across multiple dimensions. So it looks at its 00:11:03.539 --> 00:11:06.519 cultural compatibility, its social impact on 00:11:06.519 --> 00:11:09.100 local communities, and its natural environmental 00:11:09.100 --> 00:11:11.580 footprint. So it's like a scoring system. Exactly. 00:11:11.620 --> 00:11:14.679 It's a structured matrix that forces a bank to 00:11:14.679 --> 00:11:17.399 numerically score an investment rather than just 00:11:17.399 --> 00:11:20.200 going off a gut feeling or PR. I love that. And 00:11:20.200 --> 00:11:22.120 they took this framework and pushed it to its 00:11:22.120 --> 00:11:24.899 logical conclusion, right? Because in 2012, they 00:11:24.899 --> 00:11:26.820 launched their own stock. and pension funds. 00:11:27.039 --> 00:11:29.659 They did, including a sustainability fund they 00:11:29.659 --> 00:11:32.500 created in partnership with the bank, M .M. Warburg 00:11:32.500 --> 00:11:35.600 and C .O. But here's where it gets really interesting 00:11:35.600 --> 00:11:40.320 because The Wikipedia article notes a massive 00:11:40.320 --> 00:11:43.860 glaring contradiction in how these funds operate. 00:11:44.039 --> 00:11:46.019 That's a very controversial point. Yeah. The 00:11:46.019 --> 00:11:48.919 Styler Bank's own equity fund actually contains 00:11:48.919 --> 00:11:51.659 investments in controversial companies, companies 00:11:51.659 --> 00:11:54.259 that actively violate some of those ethical guidelines 00:11:54.259 --> 00:11:55.960 we just talked about. They do hold those stocks, 00:11:56.379 --> 00:11:59.559 yes. And they publicly flag these specific controversial 00:11:59.559 --> 00:12:02.500 companies on an internal watch list. OK, I have 00:12:02.500 --> 00:12:04.279 to push back hard on this because that sounds 00:12:04.279 --> 00:12:06.259 like a massive loophole. It definitely looks 00:12:06.259 --> 00:12:08.919 like when it first glance. Right. How can an 00:12:08.919 --> 00:12:12.620 ethical, ecological bank justify holding controversial 00:12:12.620 --> 00:12:15.539 stock? If a company is engaging in practices 00:12:15.539 --> 00:12:18.460 that clearly violate your core mission of justice, 00:12:19.019 --> 00:12:21.320 why wouldn't you just sell the stock immediately? 00:12:21.399 --> 00:12:23.519 It's the obvious question. Isn't holding onto 00:12:23.519 --> 00:12:25.379 it and just putting it on a little watch list 00:12:25.379 --> 00:12:28.419 a convenient excuse for hypocrisy? I mean, you're 00:12:28.419 --> 00:12:31.240 still pocketing dividends from bad actors. How 00:12:31.240 --> 00:12:34.000 do they explain that to their 16 ,000 customers 00:12:34.000 --> 00:12:36.720 who trust them to keep their money clean? Well, 00:12:36.720 --> 00:12:39.059 what's fascinating here is the tension between 00:12:39.059 --> 00:12:43.039 moral purity and practical impact. This is the 00:12:43.039 --> 00:12:46.620 central debate that literally every serious ESG 00:12:46.620 --> 00:12:50.679 fund wrestles with. OK. The natural instinctual 00:12:50.679 --> 00:12:53.940 response to a bad corporate actor is divestment. 00:12:54.080 --> 00:12:56.019 Right. You just sell it and walk away. You sell 00:12:56.019 --> 00:12:57.980 the stock, you wash your hands of the company 00:12:57.980 --> 00:13:00.200 entirely, and you get to maintain a perfectly 00:13:00.200 --> 00:13:03.539 clean conscience. But when you divest, you surrender 00:13:03.539 --> 00:13:05.840 all of your leverage. Because you no longer own 00:13:05.840 --> 00:13:07.539 a piece of the company, so they don't have to 00:13:07.539 --> 00:13:09.639 listen to you anymore. Exactly. The problem with 00:13:09.639 --> 00:13:12.419 divestment, if Styler Bank sells those controversial 00:13:12.419 --> 00:13:14.820 shares, someone else in the market is just going 00:13:14.820 --> 00:13:17.059 to buy them. Probably someone who doesn't care 00:13:17.059 --> 00:13:20.559 about ethics. Most likely a hedge fund or an 00:13:20.559 --> 00:13:22.120 institutional investor who does not care about 00:13:22.120 --> 00:13:24.600 the Frankfurt Hohenheimer Light Fund at all. 00:13:25.379 --> 00:13:27.480 And the controversial company just keeps operating 00:13:27.480 --> 00:13:30.350 exactly as before. Nothing changes. Nothing changes. 00:13:30.730 --> 00:13:33.149 But if you hold the stock, even a small percentage, 00:13:33.950 --> 00:13:36.269 you maintain your legal rights as a shareholder. 00:13:37.169 --> 00:13:40.370 And to give you some scale, the bank itself owns 00:13:40.370 --> 00:13:44.610 about 18 % or 2 .5 million euros of that 15 million 00:13:44.610 --> 00:13:46.789 euro equity fund. OK, that's a decent chunk. 00:13:47.009 --> 00:13:49.610 Right. So by keeping certain controversial companies 00:13:49.610 --> 00:13:52.090 on a watch list rather than immediately dumping 00:13:52.090 --> 00:13:54.899 them, they are choosing active engagement. Like 00:13:54.899 --> 00:13:57.299 showing up to meetings. Exactly. They can attend 00:13:57.299 --> 00:13:59.299 shareholder meetings, they can file resolutions, 00:13:59.919 --> 00:14:02.580 demand supply chain transparency, and essentially 00:14:02.580 --> 00:14:05.759 force executives to answer uncomfortable questions 00:14:05.759 --> 00:14:08.720 on the public record. But doesn't owning 18 percent 00:14:08.720 --> 00:14:11.840 of a fund with bad actors still open them up 00:14:11.840 --> 00:14:13.840 to the criticism that they're quietly profiting 00:14:13.840 --> 00:14:16.659 off the very harm they claim to fight? That just 00:14:16.659 --> 00:14:18.759 seems like a nearly impossible tightrope to walk. 00:14:18.899 --> 00:14:21.990 It is an incredibly difficult tightrope. It really 00:14:21.990 --> 00:14:23.889 highlights the fundamental paradox of trying 00:14:23.889 --> 00:14:25.950 to change the global financial system from the 00:14:25.950 --> 00:14:28.909 inside. You cannot force a market to reform if 00:14:28.909 --> 00:14:31.950 you refuse to participate in it. Maintaining 00:14:31.950 --> 00:14:35.409 absolute moral purity often means isolating yourself 00:14:35.409 --> 00:14:37.950 from the actual levers of power. You take yourself 00:14:37.950 --> 00:14:40.470 off the board. Right. So by staying in the room, 00:14:40.929 --> 00:14:43.330 they are intentionally prioritizing pragmatic 00:14:43.330 --> 00:14:46.100 influence over symbolic purity. It's a messy 00:14:46.100 --> 00:14:48.899 reality. But I mean, maintaining that delicate 00:14:48.899 --> 00:14:52.399 ethical balance, you know, holding controversial 00:14:52.399 --> 00:14:55.539 stock to force internal corporate change while 00:14:55.539 --> 00:14:58.940 simultaneously funding aid projects in 70 countries 00:14:58.940 --> 00:15:01.379 that requires a massive administrative engine. 00:15:01.639 --> 00:15:04.299 It's not a small operation. You can't run that 00:15:04.299 --> 00:15:06.600 kind of global financial operation out of a ledger 00:15:06.600 --> 00:15:08.360 in a church basement. They have to function like 00:15:08.360 --> 00:15:10.620 a highly competitive modern financial machine. 00:15:10.779 --> 00:15:13.259 And the scale of their operations really proves 00:15:13.259 --> 00:15:15.970 that executing ethical banking requires hardcore 00:15:15.970 --> 00:15:18.889 traditional banking infrastructure. By 2017, 00:15:19.070 --> 00:15:22.789 the bank managed 288 .9 million euros in total 00:15:22.789 --> 00:15:25.509 assets, and they operated all of that with a 00:15:25.509 --> 00:15:28.809 relatively lean staff of just 50 employees. Managing 00:15:28.809 --> 00:15:32.090 almost 300 million euros with just 50 people, 00:15:32.370 --> 00:15:34.149 I mean, that's only possible because they are 00:15:34.149 --> 00:15:36.370 fully plugged into the mainstream banking grid, 00:15:36.549 --> 00:15:39.190 right? Absolutely. They utilize the exact same 00:15:39.190 --> 00:15:42.230 technological and regulatory leverage as the 00:15:42.230 --> 00:15:44.610 commercial giants. Like, the source notes, they 00:15:44.610 --> 00:15:46.690 are members of the deposit insurance fund of 00:15:46.690 --> 00:15:48.970 the Bundesverband Deutsche Bank. Right, which 00:15:48.970 --> 00:15:51.529 is crucial. Yeah, meaning their customer's money 00:15:51.529 --> 00:15:54.129 carries the exact same federal protection it 00:15:54.129 --> 00:15:56.980 would at, say, Deutsche Bank. And they also join 00:15:56.980 --> 00:15:59.840 the cash pool network, which is a massive logistical 00:15:59.840 --> 00:16:01.940 advantage for them. Because it gives their customers 00:16:01.940 --> 00:16:05.259 free access to over 2000 ATMs nationwide, right? 00:16:05.419 --> 00:16:08.500 Exactly. And on the software side, they aren't 00:16:08.500 --> 00:16:10.980 building everything from scratch. They use the 00:16:10.980 --> 00:16:14.399 Agri 21 core banking system from a Truvia AG 00:16:14.399 --> 00:16:17.440 over in Minster. So plugging into that established 00:16:17.440 --> 00:16:19.940 infrastructure is the secret to their survival. 00:16:20.100 --> 00:16:22.639 It has to be. They don't need to employ an army 00:16:22.639 --> 00:16:25.080 of software developers to build a proprietary 00:16:25.080 --> 00:16:27.759 banking app. And they certainly don't need to 00:16:27.759 --> 00:16:29.919 physically build thousands of their own ATMs. 00:16:30.600 --> 00:16:33.080 By leasing the standard technological backbone 00:16:33.080 --> 00:16:36.799 of the financial industry, a tiny 50 person team 00:16:36.799 --> 00:16:39.840 can offer a user experience that basically rivals 00:16:39.840 --> 00:16:42.340 a multinational corporation. It's incredibly 00:16:42.340 --> 00:16:45.779 efficient. But so what does this all mean when 00:16:45.779 --> 00:16:47.539 we look at the ultimate bottom line? Because 00:16:47.539 --> 00:16:51.120 the numbers from 2012 tell a wild story about 00:16:51.120 --> 00:16:53.799 how this bank actually measures success. The 00:16:53.799 --> 00:16:55.460 profit numbers are always a shock to people. 00:16:55.950 --> 00:17:00.289 In 2012, the bank managed client assets of 409 00:17:00.289 --> 00:17:04.480 .4 million euros. But they generated a profit 00:17:04.480 --> 00:17:08.380 after tax of only 0 .32 million euros. Yep. 320 00:17:08.380 --> 00:17:11.859 ,000 euros. That is just 320 ,000 euros in profit 00:17:11.859 --> 00:17:15.299 on over 400 million in managed assets. It's tiny. 00:17:15.480 --> 00:17:18.000 I mean, if a traditional commercial bank posted 00:17:18.000 --> 00:17:21.519 a 300k profit on 400 million of managed assets, 00:17:21.900 --> 00:17:23.660 Wall Street analysts would downgrade the stock 00:17:23.660 --> 00:17:26.079 instantly. The board of directors would be fired 00:17:26.079 --> 00:17:27.619 by the end of the day. Oh, absolutely. It would 00:17:27.619 --> 00:17:30.240 be a scandal. So how do we even measure success 00:17:30.240 --> 00:17:32.460 here if the profit margin is basically a rounding? 00:17:32.430 --> 00:17:35.369 Well, we measure it by completely redefining 00:17:35.369 --> 00:17:37.210 the fundamental purpose of the corporate entity. 00:17:37.230 --> 00:17:40.390 In traditional capitalism, a low profit margin 00:17:40.390 --> 00:17:43.569 is a catastrophic failure, right? Because the 00:17:43.569 --> 00:17:46.710 ultimate legally mandated goal of the institution 00:17:46.710 --> 00:17:49.250 is to hoard capital and enrich the shareholder. 00:17:49.309 --> 00:17:51.549 Right, you want the line to go up. But for Styler 00:17:51.549 --> 00:17:55.089 Bank, that low profit is not a failure of efficiency. 00:17:55.410 --> 00:17:58.309 It is the deliberate mathematical design of the 00:17:58.309 --> 00:18:00.289 system. Because the bank is not the destination 00:18:00.289 --> 00:18:02.740 for the money. It's just a pipe. That's a great 00:18:02.740 --> 00:18:05.839 analogy. The bank acts as a high -speed conduit. 00:18:06.180 --> 00:18:08.259 They intentionally minimize their own corporate 00:18:08.259 --> 00:18:11.319 hoarding. They pay their 50 employees fair wages. 00:18:11.740 --> 00:18:14.079 They pay the licensing fees for that sophisticated 00:18:14.079 --> 00:18:17.220 Agri21 IT infrastructure. They maintain their 00:18:17.220 --> 00:18:19.900 mandatory regulatory capital buffers. And then 00:18:19.900 --> 00:18:22.519 they stop. They just stop. They actively refuse 00:18:22.519 --> 00:18:24.740 to extract excess capital from the system just 00:18:24.740 --> 00:18:26.740 to bloat their own balance sheet. Because they 00:18:26.740 --> 00:18:29.119 keep their internal profit retention so incredibly 00:18:29.119 --> 00:18:32.130 low, they maximize the flow through. The money 00:18:32.130 --> 00:18:34.730 going out to the mission. Right. When you combine 00:18:34.730 --> 00:18:37.769 the bank's own capital yield... with the voluntary 00:18:37.769 --> 00:18:40.430 interest donations from those 16 ,000 customers 00:18:40.430 --> 00:18:43.569 we talked about. They were able to pass on 3 00:18:43.569 --> 00:18:46.730 .37 million euros directly to the Styler mission 00:18:46.730 --> 00:18:49.390 that exact same year. Wow. When you hear that 00:18:49.390 --> 00:18:51.769 number, the scale of the achievement really sets 00:18:51.769 --> 00:18:55.150 in. It's staggering. They kept roughly 300 ,000 00:18:55.150 --> 00:18:57.230 euros to keep the lights on and maintain the 00:18:57.230 --> 00:19:00.710 servers and pushed over 3 .3 million euros out 00:19:00.710 --> 00:19:03.690 into the world to fund Activ -Aid projects. They 00:19:03.690 --> 00:19:05.930 are taking deeply capitalist infrastructure. 00:19:05.769 --> 00:19:09.049 The ATMs, the federal deposit insurance, the 00:19:09.049 --> 00:19:12.289 core banking software, the equity funds, and 00:19:12.289 --> 00:19:15.670 using it to execute a fundamentally anti -capitalist 00:19:15.670 --> 00:19:19.049 outcome. The radical voluntary redistribution 00:19:19.049 --> 00:19:21.170 of wealth to those who need it most. And the 00:19:21.170 --> 00:19:22.829 brilliance of the design is that it requires 00:19:22.829 --> 00:19:25.640 zero sacrifice from the end user. Right. To the 00:19:25.640 --> 00:19:27.420 customer who's swiping their debit card at a 00:19:27.420 --> 00:19:29.759 cash pool ATM in Munich or checking their balance 00:19:29.759 --> 00:19:32.500 on their phone, it feels identical to normal 00:19:32.500 --> 00:19:35.019 banking. No friction. The convenience, the security, 00:19:35.079 --> 00:19:37.819 the interface, it's all exactly the same. Only 00:19:37.819 --> 00:19:39.799 the underlying philosophy of where the yield 00:19:39.799 --> 00:19:42.240 goes has been reversed. Which is just so cool. 00:19:42.920 --> 00:19:45.759 As we wrap up this deep dive, the ultimate takeaway 00:19:45.759 --> 00:19:48.799 for you, the listener, is a complete shift in 00:19:48.799 --> 00:19:50.980 how we view the financial systems around us. 00:19:50.980 --> 00:19:53.200 Definitely. We're so conditioned to believe that 00:19:53.200 --> 00:19:56.390 financial structures you know, banks, investment 00:19:56.390 --> 00:19:58.950 funds, interest rates, deposit insurance are 00:19:58.950 --> 00:20:01.549 inherently tied to corporate greed. But they 00:20:01.549 --> 00:20:04.589 aren't. They are ultimately just tools, blank 00:20:04.589 --> 00:20:06.509 pieces of infrastructure. This is waiting to 00:20:06.509 --> 00:20:09.450 be used. Exactly. Styler Bank proves that with 00:20:09.450 --> 00:20:11.750 a little creativity and a willingness to navigate 00:20:11.750 --> 00:20:14.970 complex regulations, those exact same tools can 00:20:14.970 --> 00:20:17.829 be completely re -engineered. They can be calibrated 00:20:17.829 --> 00:20:20.970 to prioritize global aid over shareholder supremacy. 00:20:21.049 --> 00:20:23.769 And they can do it without asking everyday people 00:20:23.769 --> 00:20:26.390 to sacrifice the security or conveniences of 00:20:26.390 --> 00:20:28.109 modern banking. You know, this actually raises 00:20:28.109 --> 00:20:30.549 an important question, something deeply provocative. 00:20:30.410 --> 00:20:32.410 for you to consider as we close. What's that? 00:20:33.069 --> 00:20:36.009 If a single Catholic missionary order in 1964 00:20:36.009 --> 00:20:39.230 could build a fully compliant, heavily regulated 00:20:39.230 --> 00:20:42.210 bank from scratch just to bypass a regulatory 00:20:42.210 --> 00:20:45.210 hurdle and fund their operations, what is stopping 00:20:45.210 --> 00:20:47.930 today's massive global charities from doing the 00:20:47.930 --> 00:20:51.730 exact same thing? Oh, wow. That completely changes 00:20:51.730 --> 00:20:55.529 the scale of what is possible. Doesn't it? Imagine 00:20:55.529 --> 00:20:57.900 if... Instead of spending millions on marketing 00:20:57.900 --> 00:21:00.339 campaigns constantly asking for your spare money, 00:21:00.819 --> 00:21:03.059 the world's biggest non -profits organizations 00:21:03.059 --> 00:21:06.299 fighting global poverty or funding medical research 00:21:06.299 --> 00:21:09.079 simply became the place where you did your daily 00:21:09.079 --> 00:21:12.099 banking. That's a wild thought. What if the future 00:21:12.099 --> 00:21:14.440 of charitable giving isn't a telethon asking 00:21:14.440 --> 00:21:17.799 for a donation, but an institution offering you 00:21:17.799 --> 00:21:20.119 a highly competitive checking account? Now that 00:21:20.119 --> 00:21:22.220 is something to chew on. Instead of endlessly 00:21:22.220 --> 00:21:24.099 running the neighborhood bake sale, you just 00:21:24.099 --> 00:21:26.670 build the bakery. Thank you so much for joining 00:21:26.670 --> 00:21:29.430 us on this deep dive. We hope you walk away looking 00:21:29.430 --> 00:21:32.150 at the app on your phone and your own bank account 00:21:32.150 --> 00:21:34.329 just a little bit differently today. Thank you 00:21:34.329 --> 00:21:34.730 for listening.