[nomadbrah]

https://www.reuters.com/article/us-swiss...SKCN1J31UR

Quote:

Contrary to common belief, most money in the world is not produced by central banks but is instead created by commercial lenders when they lend beyond the deposits they hold for savers.

This arrangement, underpinned by the belief that most debts will be repaid, has been a cornerstone of the global capitalist system but opponents say it is unstable because the new money created exceeds economic growth.

Swiss campaigners want to replace this approach, where banks regularly roll over their financing of loans, with a system of “Vollgeld” - which can be translated to “real money”.

“A large majority of people in Switzerland don’t want commercial banks to produce money out of nothing and believe only the SNB should have the right to create money in Switzerland – this is their chance to make this happen,” said Raffael Wuethrich, one of the campaign’s leaders said.

The Sovereign Money initiative would allow banks only to give credit to customers using funds they have from long term customer deposits, the Swiss National Bank (SNB) or money markets.

It's a time for "conspiracy theory" moving into the mainstream huh?

[Belgrano]

You're a bit late to the party:

Swiss voters reject ‘sovereign money’ initiative

Quote:

Bankers relieved after referendum ends plans to shake up nation’s financial system.

Swiss voters have decisively rejected radical proposals meant to make the financial system safer by changing the way banks provide loans to the economy.

In a referendum on Sunday, just 24.3 per cent of voters supported the Vollgeld, or “sovereign money”, initiative, which would have stripped banks of their ability to “create” money when giving loans to consumers and businesses.

The result came as a relief to the Swiss National Bank, the central bank, and others in the country’s finance sector. Thomas Jordan, chairman of the SNB, said during the referendum campaign that the Vollgeld initiative was “an unnecessary and dangerous experiment” that would damage the Swiss economy.

Responding to the outcome of the referendum, the central bank said a Yes vote would have made its work “considerably more difficult”.

The Vollgeld plan would have abolished “fractional reserve” banking — the basis of financial systems around the world, under which only a fraction of deposits held by banks on behalf of customers are backed by notes and coins or banks’ deposits at the central bank.

In addition, the SNB would have had the authority to allocate central bank money to the government — or even directly to the public.

Advocates of the idea argued that this would have made Switzerland’s financial system safer by reducing indebtedness and preventing boom-and-bust credit cycles. They also argued that money was a “public good,” which should be controlled by a state institution such as the SNB.

Supporters of the idea said Sunday’s vote would not end an international debate over the health of global finance.

“The fact that around a quarter of voters supported the Vollgeld initiative shows there is a real appetite for radical reform of a money and banking system which does not seem to be working for most people,” said Fran Boait, executive director of Positive Money, a London-based reseach and financial reform campaign group.

Emma Dawnay, spokeswoman for the Swiss campaign, described the result as “very respectable” given the strength of opponents, and the campaign had raised awareness of how money was created. “The first step towards reform of the financial system is to understand how it works,” she said.

Opponents of the Vollgeld initiative, including Switzerland’s main political parties, had argued that it would rip up a well-tested financial system that encouraged economic growth and had been significantly strengthened over the past decade.

Sergio Ermotti, chief executive of UBS bank, had said voters would have to be “suicidal” to vote for it.

Herbert Scheidt, chairman of the Swiss Bankers Association, said on Sunday that the plan’s clear rejection showed that Swiss voters supported “the existing, stable and high-performing economic and monetary system”.

Pressure for reform of fractional reserve banking has grown since the global financial crises of 2007-08, with proponents of changes including Mervyn King, former governor of the Bank of England.

The Vollgeld proposals were similar to ideas that emerged in the US in the 1930s, in the wake of the Great Depression. In 1935, the economist Irving Fisher proposed a “100 per cent reserve banking” system to eliminate bank runs, smooth economic cycles and reduce indebtedness.

Under Switzerland’s system of direct democracy just 100,000 signatures are required to trigger a referendum, meaning the affluent Alpine economy has often served as a test of public support for radical ideas.

Vollgeld supporters could take some comfort in winning a higher share of the vote than the 23.1 per cent won two years ago by campaigners for the introduction of unconditional “basic incomes”.

[nomadbrah]

1/4 of the votes is pretty good though.

This kind of stuff was relegated to obscure internet forums 10 and 20 years ago.

[Simeon_Strangelight]

It was an incomplete measure anyway - the only thing that would have been limited is fractional reserve lending. Obviously that would have been a step in the right direction, but you need other measures to be taken as well. If they had attempted to introduce that, then the economy would have totally tanked as they would have restricted money supply tremendously.

This has to be addressed differently. Adopting the Silvio Gsell model would have totally made it work, but this would hardly be a solution.