Great post Daniel, maybe we should employ a few Swiss & Icelandic people here to straighten up our banking system. Surely it makes financial sense as well as common sense to have the Government create money and not shady dealing bankers? Otherwise there is no way of controlling it.
By Daniel Margrain
Switzerland is set to hold a referendum to decide whether to ban commercial banks from creating money. This follows a move by over 110,000 people in that country who signed a petition calling for the central bank to be given the sole power to create money within the financial system. The campaign is designed to limit financial speculation by requiring banks to hold 100 per cent reserves against their deposits.
Banks will no longer be able to create money for themselves (euphemistically termed fractional reserve banking), rather they will only be allowed to lend money that they have accumulated from savers or other banks. Currently banks are able to lend money that they don’t actually have and then command interest on the non-existent money.
This is akin to x offering to loan y a sum of say, £100,000 that the former hasn’t got. The way around this…
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