Swiss vote on whether to introduce ‘real money’ plan

Lloyd Doyle
June 12, 2018

On Sunday, June 10, Swiss voters will decide whether to support "Vollgeld", a radical reform aimed at further centralizing financial authority or to axe the fractional-reserve banking system in which banks create money as a way of extending credit, lending out far more than they hold in deposits.

More than three quarters of voters rejected the Sovereign Money initiative which could have had repercussions beyond Switzerland if accepted.

Expecting this to be an unlikely result it is expected that Swiss citizens will vote for more of the same, until the next crisis.

Each of the self-governing cantons in the country also voted no in the poll that needed a majority from the 26 cantons along with a simple majority from voters to be successful.

Financial institutions in Switzerland and around the world create electronic money every day when they lend money to households and businesses.

"We are pleased, this would have been an extremely damaging initiative", said Heinz Karrer, president of business lobby Economiesuisse.

The Vollgeld Initiative, also known as Sovereign Money, attracted worldwide attention because it would have upended the banking system in a country known for its banks.

This arrangement, underpinned by the belief that most debts will be repaid, has been a cornerstone of the global capitalist system but opponents say it is unstable because the new money created exceeds economic growth.

If the plan had been approved, Switzerland would have become the first nation worldwide to introduce that type of scheme, which led the plan's opponents to call it a risky experiment that would hurt the economy.

Other reports by Iphone Fresh

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