• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Go to Positive Money Europe

Positive Money

Making money and banking work for society

  • About us
    • Our vision
    • Who we are
    • History & highlights
    • Contact us
    • Current vacancies
    • In the media
    • Funding & Annual Reports
  • What we do
    • Educate & empower
    • Research and Policy
    • Campaign & local groups
    • Influence decision makers
    • In the media
    • International Movement
    • Events
  • Resources
    • Videos
    • Publications
    • Local group resources
    • Lobby your MP
    • Organise an Event
    • Policy resources
    • Shop
  • Press
  • Blog
  • Donate
  • Positive Money Europe

Positive Money welcomes unprecedented Swiss sovereign money referendum

by Simon Youel

LONDON, 5 June 2018 – Research and campaign group Positive Money has today welcomed Switzerland’s referendum on the radical Vollgeld reform, taking place on Sunday 10 June 2018.

In an unprecedented vote, citizens will be deciding whether or not Switzerland should introduce a Vollgeld sovereign money system, which would see an end to fractional reserve banking, or in other words, the ability of private banks to create ‘loans’ that then become new money in the form of bank deposits.

Contrary to popular understanding, the vast majority of the money supply in modern economies is created by commercial banks when they issue loans, as explained by the Bank of England. It is estimated that around 90% of Switzerland’s money supply is created in this way.

The way that money is essentially created ‘out of thin air’ by private banks leads to financial instability and a heightened risk of crises. The money commercial banks create is also poorly distributed, with most of the money being lent for already existing property and financial speculation, while the real economy is starved of funds.

In the decade since the financial crisis 55% of money created by UK banks has gone towards mortgage lending, 18.7% went to the financial sector, 6.1% was lent as consumer loans, 6.2% to real estate companies and around 1.5% to insurance companies and pension funds. Meanwhile productive lending only accounted for 10.4% of money created by banks, and just over 2% went towards public services.

Critics of fractional reserve banking advocate for a sovereign money system, like Vollgeld, in which only the central bank has the ability to create new money. Though the two are often conflated, sovereign money is not to be confused with full reserve banking – the former would be based on every citizen having access to a deposit account at the central bank, rather than all private bank lending having to be fully backed by reserves.

The sovereign money referendum in Switzerland was triggered by the Vollgeld Initiative gaining over 100,000 signatures in favour of it. Switzerland’s Vollgeld Initiative is part of the International Movement for Monetary Reform (IMMR), which was set up by Positive Money in 2013.

Positive Money has been one of the leading organisations bringing sovereign money back onto the agenda since the financial crisis. Its work on sovereign money attracted a growing audience of over 65,000 supporters and 35 Positive Money local groups across the UK, and in 2017 the organisation launched Positive Money Europe.

Positive Money executive director Fran Boait said:

“We welcome the fact that Swiss voters will be given a say in what kind of money and banking system they want on June 10. The Swiss Vollgeld referendum provides a crucial opportunity not just for Switzerland, but the rest of the world, to decide who should have  control of the power to create money.

“Private banks have shown that they cannot be trusted with the privilege of money creation, as their irresponsible lending has resulted in financial crises as well as a failure to invest in the real economy. Money is a public good and publicly accountable institutions such as central banks should play a greater role in its creation, as Switzerland’s Vollgeld Initiative rightly argues.”

“We hope such critical issues are also given the attention they deserve in the UK, where voters are increasingly disillusioned with the self-serving nature of our financial system and support for sovereign money proposals is growing.”

 

Notes

 

For additional comment or to arrange a briefing, please contact Simon Youel on 07908 037569 or at simon.youel@positivemoney.org.uk

About Positive Money

Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters.

 

In the News, Options for Banking Reform, Press releases, Public Money Creation bank lending, press release, Public Money Creation, Sovereign Money Creation, vollgeld

Simon Youel

Policy and Media Officer, Positive Money

Simon works on Positive Money’s influencing programme, focusing on media engagement and policy research.

Before joining Positive Money, Simon handled media outreach for a number of technology companies and campaigns, and worked in a variety of roles in local government. He has a Masters in History from the University of Manchester, for which he specialised in the financialisation of the British economy.

Primary Sidebar

Get our latest campaign updates

Recent Posts

  • Climate Change Committee confirms voluntary pledges no substitute for financial regulation
  • What we need to see in the government’s Green Finance Strategy
  • Slavery & the Bank: acknowledgement is not action
  • 5 ways our broken economic system is damaging our mental health
  • Why we need digital money we can trust

Footer

Follow us on social media

  • Facebook
  • Instagram
  • Twitter
  • YouTube

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.


Privacy Policy, Terms & Conditions


Positive Money is a company limited by guarantee registered in England and Wales. Registered number 07253015.
Registered office: 104 Davina House, 137-149 Goswell Road, London EC1V 7ET.


Positive Money Europe