Chapter 1 argues that total global public banking capacity is exponentially greater than what tends to be reported by international institutions. Two premises support the argument. First, the financing for development literature provides an inconsistent and inaccurate empirical account of public banks around the world. The forcefulness of this premise depends on the second premise, namely that national and subnational public banks persist in significant institutional numbers and size. The chapter shows there are more than 900 public banks with nearly $49 trillion in combined assets. Understanding the actual capacity of (sub)national public banks is a precondition for having an informed debate on the future of public banks and for whom they might catalyse a global green & just transition. The chapter opens this discussion by first locating public banks within the wider credit system and in relation to other types of public financial institutions.

Mobilising capital for a sustainable economy requires action on two fronts. Current capital allocation must be shifted from an unsustainable pathway to a sustainable one and the investment gap must be filled to ensure that sustainable economy objectives are achieved; this includes fulfilment of the Paris Agreement on Climate Change and the UN Sustainable Development Goals. This chapter focuses on the latter issue: filling the investment gap. Primarily, it focuses on the example of tackling the climate change challenge, although these ideas can be applied to the wider environmental and social agendas too. It discusses how to: understand and articulate investment needs; adapt market arrangements using policy to encourage investment; improve the efficacy with which public finance crowds in private finance; and ensure impact through positive real economy outcomes. Throughout the chapter, real-world examples of the 'policy prescriptions' are offered to turn theory into practice.