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2nd November 2015, 08:08 PM | #1 |
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Swiss referendum on fractional reserve banking
A Swiss group, Monetary Modernization, has collected 100,000 signatures calling for an end to fractional reserve banking. This is sufficient to force a referendum on the matter.
It is unclear if the full reserve banking proposal would be limited to transaction accounts or also apply to savings accounts but only the Swiss National Bank would be permitted to create the country's money.
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2nd November 2015, 09:01 PM | #2 |
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I wouldn't bet any money on it passing.
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3rd November 2015, 12:38 AM | #3 |
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Banking's not very important to the Swiss economy I'm sure it could just get out of the business and do fine.
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3rd November 2015, 12:58 AM | #4 |
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975 |
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3rd November 2015, 01:30 AM | #5 |
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From the article:
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3rd November 2015, 02:54 AM | #6 |
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As I pointed out in the OP, we have yet to see the details of what might go to the referendum.
THIS THREAD offers some details about how a full reserve banking system might work. |
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3rd November 2015, 03:05 AM | #7 |
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Very good, will look into it. In general, I am fan of direct democracy and one of the biggest arguments against it, I get to hear, are arguments similar to the one researcher was quoted in OP. It makes sense but it does not have data. The Swiss way is a case study for me or data. And while this topic is lets say more academic than say topic of minarets (is it?) it will be interesting to see how this turns out.
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3rd November 2015, 04:02 AM | #8 |
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Then you really don't understand Swiss politics.
For example in 2014 the country had twelve referenda, nine of which were EV based (and two Federal counter-proposals). It's not difficult for a group to propose one, just look at the goldbuggery silliness of that year. |
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3rd November 2015, 04:03 AM | #9 |
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975 |
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3rd November 2015, 04:35 AM | #10 |
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Sigh. Before continuing with your puerile silliness I suggest you look at the ease with which an EV can be carried out in Switzerland; 2014 say, amongst others, the anti-abortion, anti-immigration and goldbug fringes manage this none too difficult feat. Should "Monetary Modernization" actually go to votation then it will fail. |
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As human right is always something given, it always in reality reduces to the right which men give, "concede," to each other. If the right to existence is conceded to new-born children, then they have the right; if it is not conceded to them, as was the case among the Spartans and ancient Romans, then they do not have it. For only society can give or concede it to them; they themselves cannot take it, or give it to themselves. |
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3rd November 2015, 04:55 AM | #11 |
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According to what I quoted in the OP, that is 5 years from now. That is plenty of time for the public to realize that questioning the wisdom of the existing banking system is not just something that "kooks" do - especially if there is yet another banking crisis or two along the way.
Whether the referendum ultimately passes or fails, the sanctity of the current banking system will continue to be questioned. |
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3rd November 2015, 08:54 AM | #12 |
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3rd November 2015, 09:07 AM | #13 |
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975 |
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3rd November 2015, 09:23 AM | #14 |
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I think it was more like 63.72%, idiots.
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3rd November 2015, 10:30 PM | #15 |
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You actually think this would be a good idea?
https://en.wikipedia.org/wiki/Econom...erland#Banking
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Another question would be: is there a middle ground? Perhaps a 20% reserve requirement, which would be much stricter than the current international standard of 8% under the Basel III accord? 30%? Why jump suddenly to 100% BTW, where do people and businesses who need loans get loans under such a regime? Other than from, say, foreign banks. Would the interest rates on these loans be reasonable? Again, I don't claim to be an expert, so I'm asking. |
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4th November 2015, 12:40 AM | #16 |
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Full reserve banking could only make the Swiss Franc more stable. It is possible that the SNB might have to print more Francs to keep up with the currency wars but that doesn't seem like a negative to me.
Obviously! In the 1930s a full reserve proposal known as the Chicago Plan (https://en.wikipedia.org/wiki/Chicago_plan) was suggested as a way out of the Great Depression. This proposal was supported by prominent economists of the time including Milton Friedman. Needless to say, the banks opposed the plan and they won out in the end. Again, the details are still up in the air but full reserve proposals (eg see http://positivemoney.org/our-proposals/) generally intend full reserve to apply to checkable deposits (transaction accounts) only. Money deposited into savings accounts (eg term deposits or NOW accounts) could still be lent out. In the most extreme proposal (full reserve on all types of accounts) the banks would have to borrow from the SNB to make loans. Of course, the banks wouldn't offer interest bearing accounts if they couldn't profit from them. |
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975 |
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4th November 2015, 05:44 AM | #17 |
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Take a look at some of the previous EV initiated referenda. This lunacy is in good company.
Evidence? With good reason, there are several critiques of Soddy's ideas; I suggest you study them. Yeh! Let's replace our banking system with....something. |
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As human right is always something given, it always in reality reduces to the right which men give, "concede," to each other. If the right to existence is conceded to new-born children, then they have the right; if it is not conceded to them, as was the case among the Spartans and ancient Romans, then they do not have it. For only society can give or concede it to them; they themselves cannot take it, or give it to themselves. |
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4th November 2015, 05:45 AM | #18 |
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4th November 2015, 05:45 AM | #19 |
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As human right is always something given, it always in reality reduces to the right which men give, "concede," to each other. If the right to existence is conceded to new-born children, then they have the right; if it is not conceded to them, as was the case among the Spartans and ancient Romans, then they do not have it. For only society can give or concede it to them; they themselves cannot take it, or give it to themselves. |
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4th November 2015, 07:08 AM | #20 |
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975 |
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4th November 2015, 07:09 AM | #21 |
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975 |
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4th November 2015, 08:57 AM | #22 |
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As human right is always something given, it always in reality reduces to the right which men give, "concede," to each other. If the right to existence is conceded to new-born children, then they have the right; if it is not conceded to them, as was the case among the Spartans and ancient Romans, then they do not have it. For only society can give or concede it to them; they themselves cannot take it, or give it to themselves. |
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4th November 2015, 10:02 AM | #23 |
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975 |
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4th November 2015, 01:01 PM | #24 |
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4th November 2015, 02:00 PM | #25 |
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4th November 2015, 05:13 PM | #26 |
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4th November 2015, 08:29 PM | #27 |
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975 |
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5th November 2015, 01:28 AM | #28 |
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I can only say I agree with WildCat.
Proponents of full reserve banking have shown precisely zero evidence for any of their claims. Criticism of full reserve banking is everywhere, with good thought-out arguments, whereas full reserve banking cooks don't even know whether they want full reserve banking on all accounts, or just on savings accounts. We could do one thing, and one thing only in this direction - force the bank to give the customer the option of selecting how much of his balance goes in the reserve, and have that go up to 100%. The floor is set by the state, the top is open to the customer. Fees and interest on the account are, of course, set by the bank. It would have approximately zero effect on banking, but it should silence the kooks somewhat. I'm sure this referendum will cost the Swiss more than a change like this one would, so there is added value in the proposal. McHrozni |
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5th November 2015, 01:45 AM | #29 |
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Who's talking specifically about "retail giants"? I'm talking about all the general banking infrastructure/services involved with me just keeping and managing my account(s). Why is a bank going to provide me with anything they can't profit from? How are they profiting from these services without raising fees?
Though I do find your accusation of clairvoyance funny
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5th November 2015, 02:11 AM | #30 |
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There's a whole bunch of economists who have proposed banking reform in some form or another. Some of those reform proposals include full reserve banking, or reforms approximately to the same effect. They include nobel laureates like James Tobin, Milton Friedman and Friedrich Hayek. Then there are other prominent figures like Martin Wolf, Irving Fisher and Kotlihoff etc. who also have proposed similar kinds of reforms. The list of names is rather long if you'd care to actually take a look. So no, it's not solely "kooks" who propose such reforms.
Here's a paper which just appeared on the Minneapolis Fed's homepage: Should We Worry About Excess Reserves? From the conclusion:
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5th November 2015, 02:40 AM | #31 |
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5th November 2015, 02:54 AM | #32 |
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5th November 2015, 03:32 AM | #33 |
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Oh good grief this is simply pathetic and demonstrative of your utter ignorance. The Chicago Plan was the brainchild of Frederick Soddy (wiki link so you can learn), something you seem to be unaware of. He was the originator of the 100% Reserves plan (in 1926) which led to the infamous letter of 1933 which proposed the Chicago Plan. Soddy, a British chemist and Nobel Laureate (1921), was an amateur economist who was utterly opposed to the "treasonable practice of uttering false money" (though many of his other ideas were quite sane). Really, if you don't know this you are in no position to discuss the matter. |
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As human right is always something given, it always in reality reduces to the right which men give, "concede," to each other. If the right to existence is conceded to new-born children, then they have the right; if it is not conceded to them, as was the case among the Spartans and ancient Romans, then they do not have it. For only society can give or concede it to them; they themselves cannot take it, or give it to themselves. |
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5th November 2015, 03:46 AM | #34 |
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ftfy.
Case in point. This is just pure fantasy that came straight from your imagination. Do you really think that the prominent economists who supported the Chicago plan didn't know what they were supporting? BTW your "idea" is based on the false notion that banks only lend money that has been deposited. |
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5th November 2015, 03:56 AM | #35 |
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5th November 2015, 04:04 AM | #36 |
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It's interesting that you should back up your claim with a wiki link. The same source (https://en.wikipedia.org/wiki/Chicago_plan) does not say that Soddy was the originator of the Chicago plan.
In 2012 the IMF produced a report that favoured a revised version of the Chicago plan (https://en.wikipedia.org/wiki/The_Ch...Plan_Revisited). I suppose you think they are kooks too. |
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5th November 2015, 04:33 AM | #37 |
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Depends on who you ask, (or the level of hubris)
Here's Allen's take on that particular issue:
Originally Posted by William R. Allen
Originally Posted by Allen
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5th November 2015, 06:14 AM | #38 |
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Quite a number of Chicago Plan supporters attempted to downplay Soddy's influence and the supporters of their theory continue in that vein. Certainly Knight's review of "Wealth, virtual wealth, and debt" and the passages in Fisher's theory of debt-deflation would indicate otherwise.
Certainly Soddy presented the same ideas. |
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As human right is always something given, it always in reality reduces to the right which men give, "concede," to each other. If the right to existence is conceded to new-born children, then they have the right; if it is not conceded to them, as was the case among the Spartans and ancient Romans, then they do not have it. For only society can give or concede it to them; they themselves cannot take it, or give it to themselves. |
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5th November 2015, 06:27 AM | #39 |
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Well, if banks are getting hefty interest fees for their mandatory deposits, it stands to reason someone will pay for them, right? As it stands the money is generating revenue by providing financing for loans, but if it's just sitting there doing nothing, someone has to finance it, right?
Who is that person or institution? Where does the money for the interest fees come from? McHrozni |
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5th November 2015, 06:35 AM | #40 |
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