Finance is of the utmost importance to the military-industrial complex. Arms companies need banking services, both to carry out their daily operations, as well as to get extraordinary funds which allow them to develop new weapons and export them to new markets, and maintain the competitive edge in a sector which is almost entirely. For these reasons, financial support is key for arms manufacturers and others with activities condemned by society as a whole. That is to say, without financing, these companies would be obliged to produce fewer weapons, pollute less, and participate in fewer of the activities that this campaign condemns.
The Banca Armada campaign condemns the financial institutions which participate in the arms business. Arms manufacturers can call upon 5 financial tools to support their activities, and the financial institutions investigated by this campaign use at least one of the following:
1. Participation as shareholders
Financial institutions, when they buy shares in a company which manufactures weaponry, are complicit in thee activities for a variety of reasons. Firstly, because by being a shareholder, one owns part of the company, and is therefore responsible in part for the decisions made by the firm. Secondly, since companies create stocks when they need funding, it finances the arms industry. And thirdly, by buying stocks, one actually raises their value and adds confidence to the company's ability to generate revenue.
2. Financing exportation
In Spain, arms manufacturers dedicate 30% of their sales to export, and they need financing in order to do this. Financing is needed in these sales, as the governments who import arms usually pay in installments. Without this aid by the banks, the current system of arms exports would be practically impossible.
3. The issuance of bonds and promissory notes
Bonds and promissory notes are titles emitted by arms manufacturers at a set price, with the promise that at the end of a certain period of time, the buyer will be paid the total value of the bond plus interest. The financial institutions then are dealers in these titles, for which they receive a commission for the profits gained for their services.
4. Investment funds
Armed investment funds are those in which banks offer stocks of the arms manufacturers. In this way, banks provide funding for arms manufacture, by offering or administrating investment funds in which clients of the bank or savings and loan confide their savings in the hope that fluctuations in stock prices will bring them profits.
5. Loans and credits to arms manufacturers.
The most direct way that banks finance weaponry is in the case of helping arms manufacturers by conceding loans and credits. These are usually granted in through a union of financial institutions, in order to achieve very large sums.
It is important is that every armed bank be considered unethical and should be rejected as an option for people of conscience and in favor of human rights. In this way, the only alternative to the armed banks are the ethical banks, because they promise to wholly agree to certain principles which ensure that financial help will not go to activities which lead to crimes against humanity and violate human rights, as happens with the arms industry.