Switzerland is set to hold a referendum to decide whether to ban commercial banks from creating money. The aim of campaigners is to limit financial speculation by forcing banks to hold 100 per cent reserves against their deposits.
If the referendum result goes the way of the campaign group, the Vollgeld Initiative and the concept known as the sovereign money initiative comes to fruition, Swiss banks will no longer be able to create money for themselves, rather they will only be allowed to lend money that they have accumulated from savers or other banks.
The current fractional reserve banking system works like this: Banks 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 conundrum is for x to then lodge the sum with another financial institution who happens to be in on the scam. Y then pays x interest on the money that x has never been in the position to lend in the first place.
You can read the rest @
This is a WONDERFUL idea, and it should be implemented globally. No bank should be able to create money.
In addition to taking speculation out of our banking systems, it would virtually bring an end to war and the type of military adventurism now running rampant in the world thanks to the US abuses of its fiscal position in world affairs.