Re:Switzerland to vote on banning banks from creating money
by lxgr on Tuesday December 29, 2015 @05:21AM
(#10806046)
> The central bank can still create money on a fractional reserve basis.
The central bank does not even need to hold fractional reserves: As the entity creating base money, it can literally create that out of thin air.
Of course, history has taught that unlimited money creation is usually a bad idea, so usually base money is now backed by public or private debt, but this idea is distinct from fractional reserve banking.
The central bank does not even need to hold fractional reserves: As the entity creating base money, it can literally create that out of thin air.
Of course, history has taught that unlimited money creation is usually a bad idea, so usually base money is now backed by public or private debt, but this idea is distinct from fractional reserve banking.