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Perhaps, but it will be closer to banning bank lending (as it is fundamentally different from lending between individuals). "Fractional reserve" is just a conv

Perhaps, but it will be closer to banning bank lending (as it is fundamentally different from lending between individuals). "Fractional reserve" is just a convenient scapegoat, as banks, once the rules and numbers are reviewed, do not lend from reserves. Any time they approve a loan, new money is put into circulation.

candiodari 9y ago
Which means that banks, get to loan money they don't have in the fractional reserve bank system. So banks are levered up like you wouldn't believe, which is a huge weakness of the financial system. And what happens to all the profits from money printing ? Why, that goes to the banks, of course. This proposal seems to simply be to only allow the central bank to lever up, and force Swiss banks to become old-US-style "investment banks". The issue with that is simple: if some banks are allowed to print money (with profits going to the richest, and everyone or "the taxpayer" guaranteeing the loans, of course), and others are not, the banks that are allowed to print money are going to marketshare, profits, ... and counterintuitively, when the economy is expanding, historically even the people they lend to. It is looking more and more like the economy is reconfiguring to the way it worked in the middle ages.
- nickik 9y ago
  There are no profits from 'printing' money. Those are simply the profits of being a bank. There are lots of regulation we should change about how banks work, but this proposal isn't one of them.
  - jabgrabdthrow 9y ago
    You are rejecting the negative connotation of the word “print” but the fact is that the bank can do a financial operation that would be illegal for a non-bank and which most humans would call printing money, and make a profit
    - nickik 9y ago
      Well. Sure, but that the government who specifically wanted it like that because that has been the traditional role of banks and everything needs to be regulated. The government went out and gave licences to do that stuff to banks. If you don't like that only some group of people is allowed to do something, then why not allow everybody to do it. Now, of course some will say, that would be bad. Fair enough, but then again, you need to select the group that you will give that privilege too. Right now that is banks. I would be perfectly happy to adopt a legal system where banks are not subject to extraordinary rules let the market decide who's debt is worth taking as 'money' but apparently most people in the world don't want that. So really that argument leads you nowhere. The question what is the goal of this initiative? For all the problems they have (or think they have) there is a pretty easy solution that one could adopt that require this essentially random solution.

candiodari 9y ago

Which means that banks, get to loan money they don't have in the fractional reserve bank system. So banks are levered up like you wouldn't believe, which is a huge weakness of the financial system. And what happens to all the profits from money printing ? Why, that goes to the banks, of course. This proposal seems to simply be to only allow the central bank to lever up, and force Swiss banks to become old-US-style "investment banks". The issue with that is simple: if some banks are allowed to print money (with profits going to the richest, and everyone or "the taxpayer" guaranteeing the loans, of course), and others are not, the banks that are allowed to print money are going to marketshare, profits, ... and counterintuitively, when the economy is expanding, historically even the people they lend to. It is looking more and more like the economy is reconfiguring to the way it worked in the middle ages.

nickik 9y ago
There are no profits from 'printing' money. Those are simply the profits of being a bank. There are lots of regulation we should change about how banks work, but this proposal isn't one of them.
- jabgrabdthrow 9y ago
  You are rejecting the negative connotation of the word “print” but the fact is that the bank can do a financial operation that would be illegal for a non-bank and which most humans would call printing money, and make a profit
  - nickik 9y ago
    Well. Sure, but that the government who specifically wanted it like that because that has been the traditional role of banks and everything needs to be regulated. The government went out and gave licences to do that stuff to banks. If you don't like that only some group of people is allowed to do something, then why not allow everybody to do it. Now, of course some will say, that would be bad. Fair enough, but then again, you need to select the group that you will give that privilege too. Right now that is banks. I would be perfectly happy to adopt a legal system where banks are not subject to extraordinary rules let the market decide who's debt is worth taking as 'money' but apparently most people in the world don't want that. So really that argument leads you nowhere. The question what is the goal of this initiative? For all the problems they have (or think they have) there is a pretty easy solution that one could adopt that require this essentially random solution.