Full-Reserve Banking in Plain English

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A few simple changes to banking that could end the debt crisis…

This proposal for reform of the banking system explains, in plain English, how we can prevent commercial banks from being able to create money, and move this power to create money into the hands of a transparent and accountable body. It builds on the work of Irving Fisher in the 1930s, and James Robertson and Joseph Huber in 2000.

In mid-2012 Positive Money will release, as a book, a much more comprehensive guide to these reforms, which will also address some of the common objections and misconceptions about the implications of ‘full-reserve’ banking.

Removing the power to create money from the banks would end the instability and boom-and-bust cycles that are caused when banks create far too much money in a short period of time.

It would also ensure that banks could be allowed to fail without bailouts from taxpayers.

It would ensure that newly-created money is spent into the economy, so that it can reduce the overall debt-burden of the public, rather than being lent into existence as happens currently.

The content in this paper was written in May 2010, and has been occasionally updated since then.


You’ll find this booklet in Our Proposal section of the website.




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  • EcoSurfer

    You should also explain in the proposed book how such a system will in the long run positively impact the housing sector which is an issue very close to most people’s hearts!

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