The same banks that caused the financial crisis currently have the power to create 97% of the UK’s money. They’ve used this power recklessly, putting most of the money they create into property bubbles and financial markets. And now they’re back to their old ways.
We need a change. The power to create money should only be used in the public interest, in a democratic, transparent and accountable way. The 1844 law that makes it illegal for anyone other than the Bank of England to create paper money should be updated to apply to the electronic money currently created by banks.
When new money is created, it should be used to fund vital public services or provide finance to businesses, creating jobs where they’re needed, instead of being used to push up house prices or speculate on the financial markets.

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The debt that Greece is expected to pay is equivalent to 175% of annual national wealth, and is an intolerable burden for the Greek people.

What would happen if a greek government decided to apply, to the letter, Article 7 of a regulation adopted by the European Union in May 2013 “on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability”, concerning countries subject to a structural adjustment plan, including in particular Greece, Portugal and Cyprus.

Paragraph 9 of Article 7 maintains that States subject to structural adjustment should carry out a complete order of public debt in order to explain why indebtedness increased so sharply and to identify any irregularities. Here is the text in full: “A Member State subject to a macroeconomic adjustment programme shall carry out a comprehensive audit of its public finances in order, inter alia, to assess the reasons that led to the building up of excessive levels of debt as well as to track any possible irregularity”.

REGULATION (EU) No 472/2013

In order to become effective, central banks must be enabled to be true masters of the money system. They need to gain full control of the money by way of monetary quantity policy. No quantity policy is possible, however, as long as the banking industry dominates the monetary system and determines the entire stock of money, while money and capital markets inherently fail to reach some ‘equilibrium’ and self-limitation. In conclusion, banks must stop acting as monetary quasi-authorities and become purely financial institutions, meaning that the banking industry must be stripped of its monetary power to create and delete money-on-account by creating or deleting primary credit. Banks ought to be free lending and investment enterprises, but just money intermediaries in this without the illegitimate privilege of conducting business on the basis of self-created money.

In the nineteenth century, and for much the same reasons, banks were stripped of their power to issue private banknotes. The monopoly of banknotes was given over to the central banks, many of which were set up in the process. Now the time is ripe for the same to be applied to money-on-account. Bank money should be phased out and central-bank money in public circulation in the form of money-on-account and e-cash phased in, resulting in a sovereign money system with full control of the stock of money. In this way, a state’s, or a community of states’, monetary prerogatives of the currency (unit of account), the money (means of payments) and the seigniorage (gain from creating money) would be fully completed. Independent public central banks – acting on a well-defined legal mandate, but not taking directives from the government – are the obvious candidates for being entrusted with the functions related to the monetary prerogatives.

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