Iceland: Fundamental reform of the monetary system must be considered

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Iceland monetary reform


“Fundamental reform of the monetary system must be considered.” Says head of Iceland Parliament’s Committee for Economic Affairs

iceland reportFrosti Sigurjonsson, Member of the Parliament of Iceland and Chairman of the Committee for Economic Affairs and Trade, today published a report outlining the need for a fundamental reform of Iceland’s monetary system.

The report, commissioned by the Prime Minister, considers the extent to which Iceland’s history of economic instability has been driven by the ability of banks to ‘create money’ in the process of lending.

The Icelandic economy has struggled with inflation and unstable exchange rates. Iceland also suffered one of the costliest banking crises in history.

The report describes how commercial banks in Iceland created far more money than was needed for economic growth. The Central Bank failed to bring the money supply under control using conventional means.

The report considers various reform proposals and concludes that the Sovereign Money proposal could provide a sound basis for effective reform in Iceland.

According to the Sovereign Money proposal, the state owned Central Bank would become the only creator of money in the economy. Furthermore, the power to allocate money would be separated from the power to create new money. The Central Bank would handle creation of money while Parliament would vote on how new money is allocated. The proposal aims to reduce the risk and instability of the monetary system, reduce debts substantially and direct the income from creating money to the state instead of commercial banks.

Further study is needed before Iceland can decide whether to take steps to implement reforms based on a ‘sovereign money’ system.

In his foreword to the report, Lord Adair Turner, former chairman of the UK Financial Services Authority and chair of the policy development committee of the international Financial Stability Board, said of efforts to make the existing financial system more stable: have still failed to address the fundamental issue – the ability of banks to create credit, money and purchasing power, and the instability which inevitably follows. As a result, the reforms agreed to date still leave the world dangerously vulnerable to future financial and economic instability.”

The prime minister of Iceland Sigmundur David Sigmundsson, said: “I am very pleased to receive this new report on monetary reform. The findings will be an important contribution to the upcoming discussion, here and elsewhere, on money creation and monetary policy.”

Frosti Sigurjonsson MP, author of the report, said: “Iceland, being a sovereign state with an independent currency, is free to abandon the present unstable fractional reserves system and implement a better monetary system. Such an initiative must however rest on further study of the alternatives and a widespread consensus on the urgency for reform.”

The full report can be downloaded here.

Read also in the Telegraph: “Iceland looks at ending boom and bust with radical money plan”


Please sign our petition to tell the future Prime Minister of the UK that money creation should only be used in the public interest. And if you’ve signed it already, share it your friends on Facebook and Twitter. And/or send them an email – here’s a simple text you can copy:

I’ve signed this petition to prevent banks from creating money. I think you’ll find it interesting – have a look and consider to sign the petition too!


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  • Dannyboy

    Great news for the Icelandic people!

    • MsWigsy

      Oh yes!! I hope they are successful so that others will follow, but I think they might have a fight on their hands when the bankers kick, scream and whine and spout why it won’t work. Stay strong Iceland and best of luck :)

  • Justin Walker

    Please don’t get carried away – the hidden hand of the globalist banksters will still be in control in Iceland. Why? Go here and see that the Central Bank of Iceland is signed up and still under the control of the secretive and unaccountable Bank for International Settlements. It is NOT the central bank that should be issuing Iceland’s money, but the country’s treasury. In Britain we did this in 1914 with the debt-free and interest-free Treasury-issued Bradbury Pound, just as the Americans did with their Greenback Dollar. When will Positive Money wake up to the realities of the New World Order that the global elite is assembling at an ever-increasing rate. You can’t just stick your heads in the sand and hope that all these ‘conspiracy theories’ are not true….wake up to the Orwellian reality of what is happening. Go to and and start your research.

    • Fortheworld

      I would like a list of names of such shadow government that rule us all

  • Gurmeet Singh

    Yes Justin’s right they need to get the Rothchild Central Bank out and create their own Sovereign money.

  • Gurmeet Singh

    Positive money is just trying to create an alternative to get more money allocated to the public, but this will not work. What we need is to convert the Central Banks into prisons and lock all the Central Bankers in there and with their accomplices, for crashing the banking system on purpose as discussed at Bilderberg.

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