The Bank of England’s quantitative easing programme risks prompting a catastrophic loss of public trust in how the UK economy is managed, Positive Money warns. The campaign group’s director said that the public will “rapidly run out of patience”, as QE drives up inequality and effectively provides a subsidy to foreign-owned corporations.
UK Parliament will hold a three hour debate on the issue of ‘Money Creation and Society’ on Thursday 20th November. This will be the first time in 170 years that Parliament has debated money creation.
Under the current monetary system customer deposits provide banks with a cheap source of central bank reserves, which are required to make the payments to other banks that may result from the issuing of loans. (Banks acquire central bank reserves (base money) when payments are made to their customers’ bank accounts.) However, despite helping to fund the loans, depositors have no say and little idea over the use of ‘their’ money. They may therefore be unwittingly helping to fund activities that they disagree with.