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 banks do create money. They have been doing it for a long time, but they didn’t realise it, and they did not admit it. Very few did. You will find it in all sorts of documents, financial textbooks, etc. But in the intervening years, and we must be perfectly frank about these things, there has been a development of thought, until today I doubt very much whether you would get many prominent bankers to attempt to deny that banks create it.”

H W White, Chairman of the Associated Banks of New Zealand, to the New Zealand Monetary Commission, 1955.

Putting it all together

Putting this all together, we can create a checklist of criteria for a positive money system. Something that meets these criteria would be an enormous improvement on the current system.

A positive system of money and banking must:

  • not create excessive debt
  • be counter-cyclical (or neutral) rather than pro-cyclical
  • support the productive economy, rather than simply extracting wealth from it
  • not trigger asset price bubbles through positive feedback loops
  • require no government support (including explicit and implicit guarantees, deposit insurance, and bailouts)
  • allow badly managed banks to go bust or be taken over by more successful banks
  • be inherently stable and self-regulating (rather than being inherently unstable)
  • ensure that businesses and entrepreneurs are able to get credit to implement their ideas
  • not require manipulation of interest rates, but rather allow interest rates to be set by the markets
  • not require any subsidies, whether indirect (deposit insurance) or hidden (such as the privilege of the banks to create the money supply and collect interest on every dollar of bank deposits)
  • have a payments system that is insulated from investment activities, so that failed investments and insolvency of a bank does not threaten the payment system (and so that no bank can be 'too big to fail' or 'too systemic to fail')
  • be transparent.  Users of the banking system should be able to see how much risk they are really taking, and have access to investment products that meet their preferred risk profile and ethical principles
  • stop private interests (including banks) devaluing money for their own benefit;
  • spread the benefit of creating new money as widely as possible, rather than going to a concentrated group of people or companies




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