Former Governor Of Bank Of Spain: Public Entity Should Create Money
Above Photo: From publicbankinginstitute.org
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Positive Money, the monetary reform group based in the UK, posts that Miguel Ángel Fernández Ordóñez, former governor of Bank of Spain, is now recommending money creation by public entity instead of by private banks. He references the advances in technology that would allow safe public issuing
He came to the Spanish Lower House on Nov 7, 2017 and said the following:
“In the latest years, some analysts have emerged who are evaluating the possibility to change current money creation system by private banks and to substitute it with another one which would let every citizen deposit their money at central banks.
These studies have surged, because the technological advances in the computing and data storage, have made it technically possible today for money to be issued by the State, and not by private banks which would be of course doing their businesses in the assets’ side, but without the need that their problems should be resolved by the State, as deposits would be completely safe at the issuing bank.
The possibility to issue public and safe money thanks to new technologies, according to these researchers, would have positive consequences, not only for the system’s stability, but also to reduce or even do without the huge prudential regulation which is today damaging financial innovation.