The case for 100% money: Ten reasons for separating money issuance from banking

Samuel Demeulemeester

Economic Affairs, 2024, vol. 44, issue 1, 57-70

Abstract: The ‘100% money’ proposal aims at divorcing the creation of money from banking, by requiring 100% reserves on transaction accounts. The public monetary authority would then be the sole issuer of means of payment, while the banks would function as true intermediaries, financing loans with pre‐existing money. This article, building on the works of 1930s economists such as Irving Fisher, presents ten arguments in favour of this reform proposal — arguing that it would, in particular, prevent cumulative variations in the money stock, facilitate monetary control, reduce government intervention in banking, improve public finances, and make money creation more neutral.

Date: 2024
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