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Swiss vote on whether to introduce 'real money' plan

Reuters  |  ZURICH 

By John Revill

ZURICH (Reuters) - Swiss voters will learn on Sunday if their country will be the first in the world to introduce a radical new financial system that would bar commercial banks creating money each time they made a loan.

Polls were due to close around 1100 GMT in the nationwide referendum on the Sovereign Money initiative, known as Vollgeld or "real money" in German, with a result expected around 1500 GMT.

The initiative, called under Switzerland's system of direct democracy after gathering more than 100,000 votes, wants to make the (SNB) the only authority in the country authorised to create money in the country.

The plan, if accepted could have repercussions beyond Switzerland's borders by removing a practice which underpins most of in the world.

Contrary to common belief, most money in the world is not produced by central banks but is instead created by commercial lenders when they lend beyond the deposits they hold for savers.

Supporters said their plan would make the Swiss financial system more secure and the money in people's accounts safe from

But opponents, including the SNB, and the banks, have said the plan was a dangerous experiment which could damage the Swiss economy.

The latest polls showed the initiative unlikely to succeed with 54 percent of respondents opposing the plan and 34 percent in favour.

(Reporting by John Revill; Editing by Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, June 10 2018. 14:45 IST