REFNATION
EconomyEnded 22 Aug

Should high street banks lose the power to create new money when they lend?

Yes 54%No 46%253 votes cast

In the UK, commercial banks create the majority of money in circulation—around 97%—when they issue loans, simultaneously creating a matching deposit. This process, confirmed by the Bank of England, drives economic activity but is criticised for contributing to debt, asset bubbles and inequality. Campaigns like Positive Money advocate shifting money creation exclusively to the central bank.

Jump to opinions· 6

Banks lost the argument, but not the debate: Yes secured the decision while No supplied the floor’s most-respected case and nearly all of its sustained reasoning. The result was a narrow endorsement of removing commercial banks’ money-creation power, paired with a striking lack of confidence in the alternative.

Yes voices framed the issue as one of privilege and double standards. The clearest formulation was blunt: “If anyone else tried to do it they be arrested for counterfeiting”; the other Yes contribution broadened the target to “sound money” and politicians “manufacturing debt”, but offered a much less settled route from diagnosis to policy.

No made the more developed case. Its strongest argument said “The question makes banking sound sinister”, defended banks as better at identifying investments than bureaucracies, and insisted the central bank already manages the process; other No voters objected that the question was “mixing up balance sheet accounting with economics”, while one reduced the objection to “Don’t see them going out of business!”

The deeper divide was over whether bank-created money is itself the scandal or simply the machinery of the fiat system. One No voice conceded that “the real question should be what system should replace it”, while the more expansive Yes intervention leapt from quantitative easing to digital control and tokenisation — evidence of a coalition united against the status quo but far less united on what follows.

The floor chose the sharper suspicion over the better-supported explanation: a Yes verdict carried by conviction, with No doing most of the arguing.

LeftCentreRight
54%
Yes · 136 votes
46%
No · 117 votes
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Debate

6 Opinions

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Glasses· 461
The Public-Order Traditionalist
Voted noRight

Sounds like a bookmaker covering it's costs. Don't see them going out of business!

Mark· 294
The Border-State Social Democrat
Voted noRight

Allowing banks to create money when they make loans is the basis of the fiat money system that we have. The real question should be what system should replace it.

JohnnyBoy· 248
The Administrative Absolutist
Voted yesH. Right

Global Baking system is effectively bust kept on life support by global scams such as NetZero and never ending wars. Hence the elite want Digital ID & CBDC to control us for ever whilst the Tech Bros try and commodities & tokenise all of life. The real issue is sound money & Politicians being prevented from manufacturing debt & weaponsing inflation against their electorates - quantitative easing. Abolish private central banks & ban compound interest. Make some unhappy!

The Atlantic Gatekeeper
Voted noRight

I I give you a loan, it's my asset and your liability. Am confused. Is this question mixing up balance sheet accounting with economics..

AlexH· 155
The Statecraft Egalitarian
Voted noLeft

The question makes banking sound sinister, but this is just the process of offering loans, like mortgages, rather than keeping money moldering in vaults. Banks specialise in identifying good investments that can repay debt, far better than bureaucracies like the Bank of England. However, the BoE understands and manages this process so the UK has the right amount of money to avoid high inflation, but companies and individuals can borrow money for profitable projects or houses.

Jonathan· 279
The Firestarter
Voted yesH. Right

If anyone else tried to do it they be arrested for counterfeiting