Modernising Money: Why Our Monetary System is Broken, and How it Can Be Fixed
(Book, 336 pages)
The book explains, in more detail than ever before, exactly how the monetary system can be fixed. The product of three years of research and development, these proposals offer one of the few hopes of escaping from our current dysfunctional monetary system. It is detailed but accessible to non-economists. (2013)
Where Does Money Come From?
(Book, 140 pages)
What is money? How is it created? How does it enter into circulation? These are simple and vital questions it might seem, but the answers remain contested and often muddled. This book, published by the New Economics Foundation, provides a comprehensive overview of how the system actually works in non-technical language, and has already replaced the usual banking textbooks in some UK universities. (2011)
Will a sovereign money system be flexible enough?
(Report, 19 pages)
Some critics have argued that a sovereign money system, in which banks are unable to create money, would not be flexible enough to meet the needs of an economy. In response, this paper explains the range of policy options that mean that a sovereign money system can be as flexible – or inflexible – as authorities would like it to be.
Would there be enough credit in a sovereign money system?
(Report, 37 pages)
Some economists, journalists and politicians have claimed that Sovereign Money proposals, in which banks are not permitted to create money, would result in the economy suffering from a shortage of credit. This report deconstructs the underlying assumptions behind the criticisms with empirical evidence and shows that stripping the banking sector of its ability to create money would not result in a shortage of credit.
Our Money: Towards a New Monetary System
(Booklet, 74 pages)
This booklet explains, in plain English, what money is and how our current monetary system came about. It discusses the problems inherent to the present system and proposes an alternative.
It also explains how the current monetary system restrains us in addressing our economic, social and environmental problems, and even worsens them. It discusses the transition to a system that would work better, the main traits of that system, and the reasons why such a better alternative is hardly considered at present. (2015)
A Scottish Currency? – 5 Lessons from the Design Flaws of Pound Sterling
(Report, 10 pages)
If an independent Scotland wished to establish its own currency, there is little sense in modelling the currency on a design that has already spectacularly failed many times in the UK, Europe and the US. (2014)
The Power of Big Finance: How to reclaim our democracy from the banking lobby
(Report, 82 pages)
Over decades, corporate lobbyists have exercised excessive influence over the system and a handful of politicians have let them, writing the rules in their favour. This report recommends a series of policies to block the various channels the City of London uses to exert influence over government and regulators. (2022)
Banking on Property: What is driving the housing affordability crisis and how to solve it
(Report, 89 pages)
In this report we expose the root causes of why genuinely affordable homes are out of reach for a growing majority of people, the uneven impact of this broken system across different demographics, and start to explore positive proposals for change.(2022)
Seeking Legitimacy: A new settlement for the Bank of England
(Report, 80 pages)
During the decade after the 2008 global financial crash, many central banks have been grappling with a profound legitimacy crisis. Outlined in the report are starting points for proposals which, if adopted, would set the Bank of England on course for greater legitimacy and accountability. (2019)
A Guide to Public Money Creation: Outlining the Alternatives to Quantitative Easing
(Report, 55 pages)
More and more people critique the Bank of England’s current Quantitative Easing programme and call for an alternative. There is a number of unconventional monetary policy proposals, also known as ‘Helicopter Money’, ‘Overt Monetary Finance’, ‘Strategic QE’, ‘Green QE’, ‘Green Infrastructure QE’, ‘People’s QE’ and ‘Sovereign Money Creation’. Each proposal will have different implications for the economy. This guide will help you better understand QE and each Public Money Creation proposal. (2016)
Quantitative Easing in the Eurozone: a One-Year Assessment
After more than a year since the initial inception of the ECB’s quantitative easing programme, a review of its impact reveals that policy makers should think twice before further expanding the programme–and could benefit from considering more direct ways of increasing spending in the real economy. (2016)
Recovery in the Eurozone: Using Money Creation to Stimulate the Real Economy
(Report, 49 pages)
This report shows that the European Central Bank’s Quantitative Easing programme will fail to deliver the type of recovery that the Eurozone needs. Instead the ECB could create new money and inject this money into the real economy rather than the financial markets. Actually, our estimates indicate that putting newly created money into the real economy could be up to 14 times more effective at growing the economy than conventional QE. (2015)
Sovereign Money – Making the Recovery Sustainable
(Report, 60 pages)
Our Sovereign Money proposal explains how the Bank of England and the government could make the recovery sustainable by creating a relatively small amount of money and spending it into the real economy. This would lead to a boost in jobs and employment, and stop the current debt-fuelled recovery turning into another crisis. (2013)
The Tragedy of Growth: To protect wellbeing and avoid ecological disaster we must abandon GDP growth and transform our economic system
(Report, 38 pages)
Critiques of Gross Domestic Product (GDP) as a measure of economic progress are widespread. However ‘beyond GDP’ narratives often seek to complement the dominant indicator with other measures of progress, aiming for ‘inclusive’ or ‘green’ growth, instead of truly moving ‘beyond GDP’.
In this report we show that such an approach is insufficient, as it does not acknowledge the full extent of the failures and consequences of GDP growth, which remains a top priority among policymakers, economists, and the media. Growth retains its privilege in policy and public discourse through its promises of enhanced life satisfaction, alleviation of poverty, and protection of the environment. We show that in reality, growth consistently fails to deliver on these promises. (2020)
Escaping Growth Dependency: Why reforming money will reduce the need to pursue economic growth at any cost to the environment
(Report, 67 pages)
A finite planet cannot sustain an ever-growing economy, and the effects of environmental degradation are already becoming alarmingly manifest. But governments around the world make growth their overriding economic objective. Why are governments so set on a policy that seems destined to destroy the environment and ecosystems on which we all depend? This report outlines why debt, both private and public, is a major reason for this ‘growth dependency’, and how reform to our money and banking system could help us escape. (2018)
Money We Trust: Designing Cash’s Digital Counterpart
(Report, 47 pages)
This report assesses both the benefits of Central Bank Digital Currencies (CBDC’s) and the main implementation risks, and explores how such risks might be mitigated by enabling more precise central bank control over the CBDC’s impact on the financial system. It is paramount that this new monetary instrument is versatile and highly controllable if the private banking sector is not to face the risk of bank runs and unwarranted disintermediation of its current functions. The CBDC design specified in this report would achieve the required degree of controllability. (2020)
The Future of Cash: protecting access to payments in the digital age
(Report, 28 pages)
The ability to make payments is fundamental to any individual’s participation in the economy. We believe that people should be able to use their money in the way they choose, and that fair and low-cost access to payments should be recognised as a universal need, like water or electricity. The Payment Systems Regulator should be given a specific job of protecting access to cash. And instead of allowing cryptocurrencies like Bitcoin, the government should work with the Bank of England to introduce “Britcoin” – a digital version of pound sterling. (2018)
Digital Cash: Why Central Banks Should Start Issuing Electronic Money
(Report, 36 pages)
This report explains how all citizens could be given the option to store digital cash at accounts at the Bank of England. These accounts could be administered by private firms which compete with each other to provide payment services, debit cards and account information. Unlike traditional banks, they wouldn’t take any risk with customers funds, and wouldn’t require taxpayer-backed deposit insurance. The report also outlines some other potential benefits of adopting Bank of England-issued digital cash. (2016)
Increasing Competition in Payment Services
(Report, 14 pages)
Update: The Bank of England has now agreed to implement the changes that we recommended in this report – full details here.
Since the crisis the government has been keen to encourage more competition between banks. Their main focus has been making it easier for people to switch their current account between different banks. But we think this misses a bigger opportunity: there is much more potential for competition from technology firms and mobile app developers, who could develop current/checking accounts and more user-friendly ways of handling your money and payments. (2014)
Sovereign Money: An Introduction
(Report, 64 pages)
This report presents a reform to the banking system that would remove the ability of banks to create money, in the form of bank deposits, when they make loans. It would transfer the ability to create new money exclusively to the state, creating what we have termed a ‘sovereign money’ system. Similar proposals have been referred to as ‘100% money’ or ‘full reserve banking’. However, there are some subtle technical differences between those proposals and the one in this paper. (2016)
A response to critiques of ‘full reserve banking’
(Journal article, 11 pages)
In this response to critiques of ‘full reserve banking’ or ‘sovereign money’ proposals, we challenge four of the main criticisms made by Fontana and Sawyer (this issue): (i) the impact of the proposal on government finances and fiscal policy; (ii) the impact of the proposal on the supply of credit to the real economy; (iii) the danger of private money creation re-emerging in the shadow banking sector; and (iv) the argument that shadow banking, not commercial banking, is the real source of financial instability.omy. (2016)
Banking, Finance and Income Inequality
(Report, 16 pages)
Inequality has increased continuously over the last thirty years. Many factors contribute to this growing gap, but one of the most significant is least understood: the role of money creation by banks. The evidence compiled in this paper suggests that there are several factors contributing to the growth of inequality, but at the heart is the operation of the banking system.
(2013)
Banking vs Democracy
(Report, 33 pages)
This report finds a banking system that has more ‘spending power’ than the democratically elected government, no accountability to the people, and massive concentration of power in the hands of a few individuals. (2012)
The Green Central Banking Scorecard (2022 edition)
(Report, 82 pages)
The 2022 Green Central Banking Scorecard updates Positive Money’s ranking of G20 central banks and prudential regulators based on their environmental credentials, to show which countries are leading the way, and which are falling behind. (2022)
Greening Finance to Build Back Better: A UK Roadmap Ahead of COP26
(Report, 38 pages)
This report was co-created with research group the New Economics Foundation (NEF) to demonstrate how the Treasury and the Bank of England could lead the way ahead of this year’s climate summit in Glasgow while ‘building back better’ from Covid.(2021)
The Green Central Banking Scorecard (2021)
(Report, 55 pages)
This report reviews the full range of policies and initiatives that an ideal green central bank would adopt across four categories: Research and Advocacy, Monetary Policy, Financial Policy, and Leading by Example. Based on this literature review, expert consultation, and bilateraliinteractions with central bankers and supervisors, we develop a system to score and rank G20 countries on the green policies and initiatives of their monetary and prudential authorities.(2021)
The Covid Corporate Financing Facility
(Report, 32 pages)
The Covid Corporate Financing Facility (CCFF) is a Bank of England and HM Treasury scheme implemented in response to the economic fallout of Covid-19. This report proposes five simple recommendations to improve the CCFF and align it with efforts to build back better, introducing new conditions that protect both workers and environment, implementing mechanisms to ensure compliance, and enhancing the transparency of the scheme.(2020)
A Green Bank of England
(Report, 53 pages)
Climate change and the low-carbon transition are directly connected to the financial and monetary system. In this report, Positive Money argues the Bank of England should be reformed to enable it to go further and be bolder in supporting a green, low-carbon transition. (2018)