Interesting news from our sister organisation MoMo in Switzerland: The survey results from a master’s thesis from the Institute of Finance and Banking at Zurich University confirm that Swiss people have no idea about how Swiss Francs are created. Here are the results and the main reactions from the press:
A survey has been carried out as part of a master’s thesis at the University of Zurich about the level of knowledge in the general population about the financial system. The results are astonishing:
- Only 13 percent know that private commercial banks provide the majority of the money in circulation.
- However, 78 percent of the Swiss population would like money to be produced and distributed solely by a public organisation working for the common good, such as the National Bank.
- Only 4 percent preferred the system we actually have today – that money is mostly created by private, for-profit companies such as commercial banks.
The survey results reinforce the Vollgeld Initiative, which currently has more than 90,000 signatures of the 100,000 required to force a binding national referendum in Switzerland. [Update on 2nd Nov: More than 100,000 verified signatures were collected.]
The study shows clearly that the Swiss people do not know who actually creates the Swiss Franc: Only 13 percent of the population are aware that, in the current system, private banks produce the majority of the money through the extension of loans. 73 percent mistakenly believe money is created by the state or by the Swiss National Bank.
Question: Who creates our money?
The survey found little support for the current monetary system, and strong support for the National Bank to play a leading role
Only a minority of 4% find the current configuration of the monetary system optimal (in which private banks produce around 90 percent of the money supply). 78% would like a public organisation with a legal obligation to serve the common good – such as the Swiss National Bank – to bring money into circulation.
Question: Imagine an optimal financial system. In your opinion, who should be allowed to create and circulate Swiss money?
The “Vollgeld-Initiative” is capable of winning
The “Vollgeld Initiative” is a People’s Initiative* to bring in a sovereign money system, where only the Swiss National Bank would be allowed to create the money supply.
People’s Initiative: Under the Swiss system of direct democracy, anyone can force a national referendum on a change to the constitution if they can collect 100,000 valid signatures within an 18 month period. The result is binding.
Finally, the survey results show that 57 percent of surveyed voters would vote for a People’s Initiative*, which would allow the State and only the State (or, more precisely the Swiss National Bank) to create money, which would mean forbidding private firms (banks) from doing this. This is the crux of the “Vollgeld Inititative”, and it shows the “Vollgeld Initiative” is capable of winning.
Question 15: Would you agree to a referendum, which asks:
- That solely the State, specifically the Swiss National Bank, may create money.
- The commercial banks (UBS, Credit Suisse, etc.) are prohibited from creating money.
1146 Swiss voters participated in the online survey, including voters from all 26 cantons of Switzerland. The data were weighted to correctly represent the Cantons. From this data base it is possible to draw out reliable conclusions about the general population. The aim of the study was twofold; firstly, to find out how people believe that today’s monetary system works; and secondly, to find out what kind of institution for creating and circulating money they would prefer.
Masters thesis by Silvan Nietlisbach at the University of Zurich, Institute for Banking and Finance (in German):
Articles in the Press:
- Blick: Eine Studie stützt das Vorhaben der Vollgeld-Initiative
- WOZ: «Die Banken können so viel Geld schaffen, wie sie wollen»
- NZZ: Abstimmung über radikale Vollgeld-Initiative absehbar
- more articles in Pressespiegel