1) The Swiss are extremely interested in banking and how it is organized. Never forget that John Calvin, the guy who "legalized" usury for Christians was operating out of Geneva when he did it. As a result, there are lots of banks and bankers in Switzerland and every Swiss person I have ever met had sturdy opinions on the subject. However, any time I mentioned some of the monetary theories proposed by the frontier nation-builders, they were dismissed as "cowboy capitalism." Yes the Swiss can also be very sanctimonious about banking.And while this crusade to "purify" Swiss banking practices is interesting on a sociological level, the monetary beliefs of the activists are far more primitive than say, the folks who organized the Greenbacks the USA used to fight the Civil War. I heard much more interesting monetary discussions in church basements in the 1950s and 60s than anything being proposed in this referendum. Just remember, in large areas of this country, monetary policy was the #1 political topic for almost a century. Turns out a lot of us in USA were just as interested in banking practices as these Swiss.
2) Now that even the Bank of England admits that virtually all of the money that is created is done by private financial institutions, many people who have never understood this absolute refutation of the basic banking myths are in a state of shock. And it looks like some Swiss citizens have organized a referendum to force their banks to practice lending as they were taught as children. As someone who has understood that banks create money since 13, I cannot even remember what it was like to believe the basic banking lie so I find this Swiss response absolutely adorable.
3) The chance of this referendum succeeding is zero. If banks can no longer create money, their business model is roughly as profitable as a pizza parlor's. Banks actually understand this so there will probably be few holds barred in their crusade to prevent this referendum from passing.
Switzerland to hold referendum on banning private banks from creating money© Dado Ruvic / Reuters, 25 Dec, 2015
A radical initiative to strip private banks of their power to “create money” and make it exclusively a central bank privilege has gathered enough support for the Swiss government to announce a referendum on the issue. A vote in favor may result in a return to 100 percent reserve banking.
“Banks won’t be able to create money for themselves anymore, they’ll only be able to lend money that they have from savers or other banks, or even, if necessary, money that the Swiss National Bank has provided them,” the campaign said in a statement on their petition website.
As soon the petition concerning changes to the Swiss banking system had received more than 100,000 valid signatures, the Swiss government confirmed it would hold the referendum, according to the Telegraph. The date when the country will vote to decide whether private banks should be keep their power of creating money has not yet been set.
The move comes as part of the Swiss Sovereign Money Initiative (known as the Vollgeld-Initiative in German) that seeks to put an end to financial speculations. The group is concerned with the current state of affairs in traditional fractional reserve banking, where real coins, banknotes and central bank liabilities account for only a minor part of money in circulation, while most of it exists as electronic cash created by private banks.
“Most people believe that the money they have in their bank accounts is real money... This is wrong! Money in a bank account is… a promise the bank makes to provide money, but it is not itself legal tender,” they group explains in their statement.
The initiative claims that it strives to change the system so that it complies with the Swiss Constitution, guaranteeing safety and avoiding such phenomena as finance bubbles and empty money.
If the change is introduced, Swiss banks would have to look for a workaround to continue providing their clients with the usual set of services.
This won’t be a first referendum on monetary policy in the recent history of Switzerland. The Swiss voted against a law that would increase country’s gold reserves from 7 percent to 20 percent back in 2014, despite early polls showing increasing support for the initiative. more