“Greater regulation of banks does not offer any meaningful solution. Regulation ignores the larger issues at play. As we’ve seen in the limited scope of reforms since the crisis, what happens is that you get thousands of pages of complex regulation. But the bank lobby has huge resources, millions of pounds, to spend on lawyers to water down these changes. And there’s nobody fighting that battle on the side of society”, argues Fran Boait, Positive Money’s Executive Director in the interview in Cherwell, 8th November 2014

“If we keep going down the regulation route, change is going to be incredibly slow. If we want to tackle the big issues like climate change, we don’t really have time to go down that road.”

“What is frustrating for us,” she says, “is that all of the political rhetoric is around the national debt, which is nothing in comparison to, and is partly caused by, private debt. Household debt, business debt, personal debt, are all at a historically high level, and that is the root of a fragile economy. If interest rates rise, people may default on their loans, which could precipitate a run on banks and a national crisis, as we saw in 2008.”

For Positive Money, instead of ever more extreme austerity measures, the deficit might easily be reduced by the revenue generated by state-created money. Because the profits from creating money currently go to the banks instead of to the government, the government has to borrow much larger amounts of money to make up for this lost income. Fran claims, “To focus on the national debt is missing the point, and ignores how the current system causes these financial crises, by accumulating massive amounts of private debt.”

You can read the whole interview here.