Today, the voters in Switzerland overwhelmingly voted against a plan that would have ordered the banks to only lend money that they had deposits to back.
Over 75 percent of the votes cast opposed the motion and none of 23 cantons of the country supported it.
The said initiative would have meant that the commercial banks would not be able to produce new money, and would only be able to lend money once they held the deposits to back it up.
The “real money” or “vollgeld” proposal would have meant that the Swiss National Bank was the only body in the nation that would be allowed to create new money.
Concerns regarding the effect of the proposals would have had on the banking sector of Switzerland, home to banking giants such as UBS and Credit Suisse, helped result in their defeat.
The president of business lobby Economiesuisse, Heinz Karrer, said that he was happy that the proposal had been turned down as they would have been “extremely damaging.”
The critics of the so-called “fractional reserve banking,” where the banks can only maintain a percentage of what they lend in deposits have included many heavyweights including Mervyn King, the former governor of the Bank of England.
Positive Money, a group in the United Kingdom, called for a “global conversation” regarding the control of the creation of money.
Fran Boait, the executive director of the group, stated: “The fact that around a quarter of voters supported the vollgeld initiative shows there is a real appetite for radical reform of a money and banking system which does not seem to be working for most people.”
He added: “This vote should not represent the end, but rather the beginning of a global conversation about whether control of money creation should be in private or public hands.”