Over the last 12 months there has been a significant increase in international interest in sovereign money (the idea of transferring the power to create money from banks to the state, working in the public interest). For example:
- Our work has been advocated by the Financial Times’ chief economics commentator, Martin Wolf, and cited by influential economists including former Bank of England governor, Mervyn King and former Financial Services Authority chairman Adair Turner.
- In the Netherlands more than 110,000 people signed a petition in favour of a sovereign money system, triggering a debate in the subject in Parliament and the commissioning of a report by the Scientific Council on Government Policy (WRR).
- In Switzerland, Positive Money’s sister organisation collected enough petition signatures to trigger a referendum on whether to implement a sovereign money system (which has already come under attack from the Swiss financial sector)
- In September 2016, KPMG (one of the largest consulting companies in the world) published an official report on sovereign money, commissioned by the office of the Prime Minister of Iceland.
- A growing number of Masters and PhD candidates are dedicating their theses to this topic.
To respond to this growing interest, in late November, 25 researchers met in The Hague, Netherlands, to discuss the priorities for research into sovereign money, and plan further research and collaboration. The attendees came from 12 different countries and included professors, PhD students, other economists and members of the International Movement for Monetary Reform (including Positive Money UK, Ons Geld from the Netherlands, and Fekyou from Greece).
We discussed some of the key areas of research around sovereign money, including issues such as:
- How do we ensure that credit in a sovereign money system will go into the real economy rather than the property markets?
- Can one country go it alone? What are the implications for foreign exchange, international trade and so on?
- How exactly should the relationship between Treasury and central bank work in a sovereign money system?
- How do we communicate the ideas around sovereign money in different countries and for different audiences?
All in all, it was a very successful first meeting of some excellent researchers. It’s exciting that research on this area is now taking place in multiple countries, and Positive Money will be heavily involved in making sure that we can answer the remaining questions about how a sovereign money system would work.