Central bank credibility? Swiss to vote to end fractional reserve and privately controlled banking

As we enter into the eighth year of the world looking at central banks with a microscope since the Credit Crisis and Great Recession, the one thing that has been front and center over the past six months has been talk of their credibility.  And it is this lack credibility that has led the Federal Reserve to hike interest rates (at a time of deflation) after a year of telling the public that was their intention all along. But the reality is, both governments and the public have all lost confidence in this 'great experiment', and even now a man who once voted down Ron Paul's bill to audit the Fed is changing course and demanding his own audit of America's privately run central bank.  Yet as long as the U.S. still controls the power of the purse in the global financial system, very little will be done to hinder the government's ability to borrow at will, especially when they are long into insolvency.


However, a new sea-change in Europe may be taking shape, and it is being instigated by perhaps the one single nation who can get away with separation from the norm, and the stranglehold of the Rothschild dominated system.  That country is Switzerland, and besides un-pegging themselves from the Euro back in January, the well recognized neutral banking power is now initiating a referendum that would end both fractional reserve banking, and even privately controlled creation of money.

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 astatement 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. - Russia Today

The Swiss have always been one step ahead of the curve when it comes to transitioning into new monetary paradigms while at the same time being able to function in whatever system is currently operational.  And perhaps the fact that they have been one of the first to see their economy shift into negative interest rates due to the incompetency of their long-standing private central bank, Switzerland's survival may hinder on them ditching this antiquated system and going back to running their own currency out of the government rather than by uncontrollable private interests.


The writing has long been on the wall for the Western monetary system to collapse, and the fiat currency paradigm to go back to a gold based system.  And to do this, removal of fractional reserve banking is a vital step towards ensuring that a nation's money is sound enough for acceptance, and strong enough to be considered a standard when the next system emerges.