All money should be created by Bank of England, for public good

Sheffield Telegraph published the following letter by Steve Penny from the Sheffield local group on 17th September 2015:

“Jeremy Corbyn is attracting criticism for his policy of creating money to fund public projects, but he deserves to be commended. Due to a legal anomaly 97% of our existing money is created by private banks when they make loans. This money is created not to serve the national interest but instead to serve their private profit.

If these loans turn bad as happened in the 2008 financial crisis then it will be down to the public once again to foot the bill to prevent a collapse of the money system and financial ruin for millions.

It is a nonsense that our government should borrow money at interest when it can be created by the Bank of England. This would allow better control of the economy helping prevent the disastrous booms and busts that result from leaving the job of creating money to banks. The problem of inflation could still be managed by control of the amount created, or by removing money from the economy via taxation.

We think Mr Corbyn does not go far enough: the legal loophole that allows private banks to create our national currency should be closed. Positive Money believes all our money should be created by the Bank of England, without the private or public sector increasing their debt burden, and for the public good. Let’s reclaim what is rightfully ours.”