The Monetary Reform resolution was put on the Parliament’s agenda in Iceland

On Wednesday 17th Feb 2016 we received great news from Iceland the Monetary Reform resolution calling for the establishment of a special commission to “carry out a review of the arrangements of money creation in Iceland and to make recommendations for improvements” was put on the parliament’s agenda.

Frosti Sigurjónsson, Member of the Parliament of Iceland and Chairman of the Committee for Economic Affairs and Trade, who published a report (commissioned by the Prime Minister) outlining the need for a fundamental reform of Iceland’s monetary system in March 2015, spoke for the resolution, where he said:

Despite various regulatory changes we have implemented in the past years we have not addressed the problem implied by the commercial banks creating money in the form of deposits. This has caused increased criticism of specialists in Iceland and abroad as it provides the banks with the flexibility and incentives to create money way beyond the need of the economy. Former governor of Bank of England has said “of all the many ways of organising banking, the worst is the one we have today.” and strongly encourages reform.

It’s long timely and in fact necessary that democratically elected representatives of the public make an independent review on the process of money creation, form an opinion and propose suggestions on how the legislation can be appropriately modified. Each participant should ask themselves if he wants to live with a currency which is effectively a debt of a credit institution or if it would be better that the Central Bank would rather issue the electronic currency that modern times require, but not only notes and coins.

The resolution now has been passed to the Committee of Economics and Trade, headed by Frosti Sigurjónsson. Hopefully we can bring you news on the matter soon and the committee will allow for reviews on the subject.

Update 25th Feb 2016:

More good news! Today the Althingi‘s (Iceland’s Parliament) commission of economics and trade called for reviews on the monetary reform resolution. The commission allows 10 days to send in reviews until 4th of March. Everyone is allowed to send in reviews. The submissions can be sent via e-mail to:nefndasvid@althingi.is.

Now, we‘re only 4 steps away from parliamentary committee on reviewing arrangements of money creation in Iceland (according to the procedure of Iceland’s parliament):

1. Agenda setting: The Speaker of Althingi puts the resolution in the agenda

2. First reading: the resolution is debated in plenary

3. Discussion in committee: the resolution would probably be passed to the Committee of Economics and Trade, headed by Frosti Sigurjónsson

4. Review: the committee calls for reviews of the resolution

5. Opinion of the committee: the committee delivers its opinion to Althingi and proposed amendments.

6. Second reading: the resolution is debated at a second plenary reading

7. Voting: Minimum of 50% participation is required. Resolution is passed if majority of votes are „Yes“.