When the Banco di San Giorgio was formed in 1408 in Genoa, Italy, there was confidence it would receive the help of God and Saint George. The first statement in its initial ledger was similar to the argument people are making now in calling for a state bank of Oregon.

A state bank is needed because private bankers aren’t doing what they should, the argument went. The bank in Genoa needed to be formed … “in order to extinguish the public debt and to eradicate certain bad practices of bankers, who are so devoted to their own interest that they barely blush as they ruin the public good, and have become accustomed to spend out and hold money not at the required price, but at an unusual and irrational price.”

Among Gov. Tina Kotek’s vetoes this session is likely to be killing a study of a state bank for Oregon, House Bill 2673.

The model for a state bank in the United States is the Bank of North Dakota, the only state bank in the country. The city of San Francisco has been getting serious about setting up its own bank. Other states have flirted with the idea.

The “Bank of Oregon” could be given a mission to invest in public priorities. It might offer “no fee” banking to consumers and take more steps to ensure every Oregonian is served by banking. It could hold state money. The loan rates it offers might be below market rates. The selection of loans it offers could match the goals of state government.

The concept attracts criticism. The Bank of Oregon’s loan-making and investments might have a political spin. Who is in power in Salem could direct the money to their own ends. It would also likely be a transfer of money from taxpayers to recipients of loans or patrons of its consumer banking.

Private bankers don’t like the idea, of course. It would bring them state competition. The state would almost certainly be taking business from business. Competing with the government is not usually a fair fight. Banks also need to be run carefully or they fail.

Kotek supports the idea of exploring the idea of a state bank, her staff said in a news release. But her concern with the bill was the added work the study would bring to the Oregon Business Development Department and the short timeline to get it done.

We don’t know if a Bank of Oregon would be a great or terrible thing for Oregon. If there are concerns with how the banking industry operates in Oregon, we don’t think the best answer is likely to be: Get the state in the banking business.

By the way, the tidbit of long ago banking history of the Banco di San Giorgio comes from a paper for the Federal Reserve Bank of Chicago, which, if you are interested, you can find here: tinyurl.com/OldBankhistory.