May 2017 Positive Money New Zealand issued a press release seeking clarity from the Reserve Bank on how our money is created.  They still refer to intermediation by the banks, which is not how our banking system works.

5th November 2016 An article in The Guardian newspaper in England argued that abolishing debt-based currency holds the secret to getting our system off its addiction to growth.

5th September 2016 KPMG released a report, commissioned by the Prime Minister of Iceland, titled "Money Issuance" The report looked at money created by the Government.

28 March 2016 Bryan Gould has agreed to be the Patron for Positive Money New Zealand.

Bryan is a respected commentator on economic matters, an author, academic and Companion of the New Zealand Order of Merit.

31 October 2015 A monetary reform group in Switzerland has enough signatures for a referendum on who creates their money supply.

14 October 2015 The Finance Commission of the Dutch parliament discussed monetary reform.

31 March 2015. The Telegraph in London reports on the Icelandic governments plan to have their central bank issue their money supply and calls it a radical plan.

22 November. The British parliament debated money creation last week, for the first time in 170 years. There was cross-party support for a proposal to set up a monetary commission

23 September. A new generation of young people, dubbed ''property orphans'' may be destined to be renters for life.

17 September. The Bank of International Settlements (BIS), the bank used by central banks, confirmed New Zealand houses are among the most "unaffordable" in the world compared to people's incomes.

6 September. Bruce Bisset of Hawkes Bay today reveals the true story behind the so called Rock Star economy.

25th April 2014 "Strip private banks of their power to create money”: says the Financial Times’ chief economics commentator Martin Wolf, who endorses Positive Money’s proposals for reform

15th March 2014 - In a historic move The Bank of England quarterly bulletin explains how money is created. Whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money. The bank says that this differs from the story found in some economics textbooks.

16th August 2013. The retiring head of the Financial Markets Authority apologised for the mistakes made saying “You were let down”.


The Earl of Caithness“… our whole monetary system is dishonest, as it is debt-based… We did not vote for it. It grew upon us gradually but markedly since 1971 when the commodity-based system was abandoned.”

The Earl of Caithness, in a speech to the House of Lords, 1997.

Positive Money UK’s Submission to the Independent Banking Commission

Positive Money UK, nef (the new economics foundation), and Professor Richard Werner of the University of Southampton,  have recently made a joint submission to the Independent Commission on Banking.

What did Positive Money UK recommend?

They have recommended the implementation of full-reserve banking for the UK, with power over the issue of the nation's money supply kept out of the hands of both vote-seeking politicians and profit-seeking banks. It is a proposal that could be implemented quickly (comfortably within 12 months) and that would have huge benefits for the economy as a whole. It may not be perfect, but it would be many times better than any banking system that we have had in the last 500 years. Download the submission below and let us know what you think.

Download the ICB Submission here (PDF, 1.1mb)

Will they listen?

Is the Commission really independent? Will they be sufficiently radical to address the real problems, or just patch up the existing system? The signs so far are pretty encouraging.
Firstly, one of the members of the Commission is Martin Wolf, Chief Economics Editor of the Financial Times. Here's what he had to say about private banks creating money:

“The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending.”
Martin Wolf, Financial Times, 9th Nov 2010

Martin Wolf has also been promoting John Kay's (not to be confused with our own John Key's) Narrow Banking proposals and Laurence Kotlikoff's Limited Purpose Banking, both ideas which would abolish money creation by private banks. And guess who the other main proponent of these ideas is? None other than the then current Governor of the Bank of England, Mervyn King, whose take on the current banking system is pretty clear:

“Of all the ways of organising banking, the worst is the one we have today. ...eliminating fractional reserve banking [money creation by private banks] explicitly recognizes that the pretence that risk-free deposits can be supported by risky assets is alchemy. To work, financial alchemy requires the implicit support of the tax payer...For a society to base its financial system on alchemy is a poor advertisement for its rationality.”
(Mervyn King, 2010, p17)

So if the top person at the Bank of England, alongside one of the most respected economists in the UK, both believe the current banking system is 'a poor advertisement for rationality', we might hope that the Commission's final recommendations do not simply involve patching up the existing system.

But most encouraging of all is the fact that the Commission's remit already includes two proposals that would eliminate money creation by private banks. Those of Kay and Kotlikoff both make it impossible for commercial banks to create money out of nothing through their "often foolish lending".

These two proposals were a late addition to the Issues paper, and we believe may have been added at the request of either Martin Wolf or Mervyn King himself. Fingers crossed that the Commission will be radical and take on board the points outlined in our submission:




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