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A new documentary film: Bank Job

November 10, 2020

JDC has drawn attention to a special online preview screening of the new documentary film Bank Job on 11 December 2020 

This mischievous feature documentary produced by artist and filmmaker team Hilary Powell and Dan Edelstyn, tells the story of a community coming together to make their own currency and open a ‘peoples’ bank. In doing so they examine how money and debt is created and ask important questions about how the system of money creation might be altered in our favour.

Their aim? To uncover the true nature of the UK’s household debt crisis, where even before Covid, 9 million people were facing problem debts.

Debt is an integral component of our current system of inequality.

97% of all money is conjured into reality at the moment when banks make loans. This means our money supply is effectively on lease from private banks – giving them inordinate power determine the course of our economic, social and common good. Yet we, the public, do not yet fully understand the way money comes into existence – and while we remain in the dark, there will be no way to change course.

The film makers explain:

Our act of citizen money creation is both a way of raising real money for specific causes in the community and a way of fundraising to buy and destroy £1million of local predatory debts.

Through the film we argue that widespread debt is the natural – though unwelcome companion to the money system we currently have and, like money, another widely misunderstood phenomena subject to myth and moralising.

From both talking to economists and our local community we discover that debt is tied to even the most basic provisions, education, healthcare, housing – as all these are being accessed through credit in one way or another.

We argue that these debts are a result of a monetary system which is impoverishing multitudes by design, and which could be changed.

Book your ticket today:

The screening will be followed by a Q&A with the Bank Job team, Ann Pettifor and Grace Blakely. 








California’s Governor, Gavin Newsom, has signed the 2020 Public Banking Act

October 3, 2020

Reinvest, Rebuild and Recover from COVID-19

Public banking is an old concept. North Dakota which has operated one since 1919, transfers all of its funds—such as tax collection and fees—to the public bank. Those funds are then lent out to small businesses and infrastructure projects through partnerships with community banks. When the great recession hit, the Bank of North Dakota stepped in and provided loans and allowed local banks to thrive.

In California, calls for public banks intensified after the financial collapse of 2008. The crisis increased demands for divestment in banks such as Wells Fargo and major financial institutions tied to the Dakota Access pipeline and other controversial projects, said Sushil Jacob, a senior attorney with the Lawyers’ Committee for Civil Rights of the San Francisco Bay area.

On October 2nd 2019 the Public Banking Institute reported that Governor Gavin Newsom had signed the Public Banking Act 857 and it will become law on January 1, 2021. This will make it easier to establish regional and municipal public banks throughout the state. California has become the first in 100 years to allow locally-chartered public banks.

Like public banks in California, it would be operated by professional bankers and run by an independent board of directors to insulate and protect against self-dealing.

The bank’s sponsor would have to propose a viable business plan which would need to be approved by the state department of business oversight and would also need approval to obtain direct deposit insurance from the Federal Deposit Insurance Corporation. The plan would have to go before the public before it moved forward. “That injects an element of sunshine and public debate,” said Jacobs, who added that because the banks would be public entities, they would be subject to laws that require them to provide the public access to records and meetings. “There are a lot of protections, far more than the current structure (of private banks).”

In January Bloomberg predicted that the second California State Public Bank Bill would move forward in 2021 and in July Biz Journal reported that further state legislation had been announced and a California public bank would be established to help with a more equitable economic recovery from the Covid-19 crisis by directly lending funds and offering credit to community banks, credit unions, municipalities and small businesses struggling because of the economic downturn caused by Covid-19.

Assembly Bill 310 (AB310) written by Assembly Members Miguel Santiago, D-Los Angeles, and David Chiu, D-San Francisco, is a follow-up to AB 857, which became law last year after several months of grassroots organizing by the California Public Banking Alliance. Both Santiago and fellow assembly member David Chiu (below right) also co-authored that bill. AB310 proposes to relocate “idle” funds from the state’s “checking account” into the California Infrastructure and Economic Development Bank, or IBank – moving 10% of the state’s Pooled Money Investment Account (PMIA) into the IBank’s loan fund.

Santiago said: “We can structure a bank that actually is accountable to the people and does what the people want it to do — we can help small businesses, we can reimagine what banking looks like and actually invest in affordable housing, we can look at local infrastructure like parks.”

Union President John Grant commented: “On behalf of the over 30,000 members of the United Food and Commercial Workers Local 770, we strongly support the creation of a public bank for the State of California. In this moment of crisis, grocery, retail drug and packing house workers are struggling in very basic ways as essential employees. If nothing else, the global pandemic gives us the opportunity to rethink equity and how we best respond to a likely imminent global recession. A public bank is a necessary part of the overall recovery.” Sushil Jacob and Paulina Gonzalez-Brito of California Reinvestment Coalition added:

The state bank will provide a counter to the global banks that have mishandled and profited substantially from funds allocated to address the current financial crisis.

Wall Street banks gave priority to large corporations in distributing Paycheck Protection Program (PPP) funds, leaving little or nothing for struggling small businesses. The Federal Reserve Bank handed out billions to the largest banks at near-zero interest with no strings attached while making municipalities beg for funds at above-market rates with onerous constraints.

Nearly two dozen other states – including four this year in New York, New Mexico, New Hampshire, and Massachusetts – have tried to establish public banks, according to Vox, but all have failed. 

Account corrected thanks to Ellen Brown of the Public Banking Institute.




Financial Times: economists call for full reserve banking

August 31, 2020

Economists from France, Germany, Denmark, Finland and New Zealand called for change in the FT, 11 hours ago. Many readers will recognise the names of Joseph Huber  (23 articles on this site) and Bryan Gould, the best Prime Minister Britain never had.

A search revealed that Jorg Guido Hulsmann is an economist who correctly anticipated the financial crisis of 2001 (after the collapse of the dotcom bubble, the 9/11 attacks, and a series of accounting scandals at major U.S. corporations) and a staunch critic of fractional reserve banking; that Patrizio Laina has advocated full reserve banking for several years and that Ib Ravn, whose primary focus is on education and psychology, has written at least three articles on money creation in his blog since 2017. Their lightly edited call (with added information and links) follows:

Fractional reserve banking is a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal.

It is risky. For hundreds of years it has resulted in bank failures with depositors losing their money. The arrival of taxpayer-backed deposit insurance in the 1930s and multi-billion-dollar bailouts of banks meant banks received state support, while other lenders who lend about as much as banks do not.

Moreover, depositing money at a bank with a view to the bank earning a return is the same as depositing money with a stockbroker for the same purpose in that both activities are commercial in nature, and it is not the job of taxpayers to support commerce, unless there are very good social reasons for doing so.

As for the alleged merit of fractional reserve banks, namely that they create money and liquidity, unfortunately they do so in a procyclical manner, which means central banks and governments have to counteract that.

Add to that the fact that private banks are totally incapable of creating the huge amounts of extra money needed in crises like the present Covid crisis.

Hence stripping private banks of their ability to create money would do no harm, as Martin Wolf, the FT’s chief economics commentator has argued on many occasions

The writers therefore wish to see the alternative to fractional reserve, that is, full reserve banking, given much more serious consideration for various reasons, including some or all of the above.

Jorg Guido Hulsmann Professor of Economics, Angers University, Angers,


Patrizio Laina Chief Economist, Finnish Confederation of Professionals (STTK), Helsinki, Finland

Joseph Huber Emeritus Chair of Economic and Environmental Sociology, Martin Luther University, Halle-Wittenberg, Germany

Ib Ravn Senior Lecturer, Aarhus University, Copenhagen, Denmark

Bryan Gould Vice-Chancellor, Waikato University Hamilton, New Zealand





A currency issuer country like the UK will come through stronger from this crisis: Apostolos Sfetsas

July 27, 2020

Apostolos Sfetsas, London-based fund reporting specialist with M&G investments, writes:


Reading the headline in the FT report (July 17) about the UK being ready to sell more than £500bn of debt this year, my instant reaction was to think that this cannot be good news about the country’s deficit and an increase in borrowing costs is most likely to follow.

Well, I was wrong on both counts. As the FT reported, the 10-year gilt yield was steady at 0.15 per cent and as Stephanie Kelton wrote in her new book The Deficit Myth, modern monetary theory explains that if the government expects to run a fiscal deficit of £500bn, the Treasury will arrange an auction of that amount.

Reading news through the correct MMT lens, especially during times of radical uncertainty helps the reader to stay calm and carry on. A currency issuer country like the UK will come through stronger from this crisis.

Geoffrey Gardiner also added a reassuring comment: “I recall Stephanie Kelton advocates that a country must borrow in its own currency. I am not sure that wise rule has been followed in the UK. My understanding of MMT – and I know its proponents – is that it is not suggested that currency be issued to the point where it blows up. Common sense is followed”.

Responding to the last post on this site, The Deficit Myth. Heather Smith (Social Credit Party, New Zealand) adds:

It’s refreshing to note that a US economist is echoing the opinions of illustrious Australian academics like Steve Hail (Adelaide University) and Bill Mitchell (Newcastle, NSW) University, published in Economic Reform Australia. whose goal is to educate and advise decision makers and the community on the economic foundations of a financially stable society based on social justice and ecological sustainability.

Heather continues: “Here in NZ the Labour-led government has finally had to admit the our sovereign Reserve Bank has the authority to issue fiat money – but, instead of allowing it to directly fund public bodies directly, it insists on the banks buying Treasury bills and bonds first with the RBNZ allowed to purchase them from said banks.  Ridiculous – but at least people are having to admit that my political party (Social Credit) has been right all along, after decades of ridicule. A shame that it’s taken a crisis for this admission”.

Kia Ora – Heather





‘The Deficit Myth’

July 7, 2020

Attention is turning to what the ‘unprecedented spending sprees Governments have embarked on’ will mean for inflation and national balance sheets when the crisis is over. Gavin Jackson (FT) asks:

  • How will public finances be brought back under control?
  • Will central banks be forced to keep rates low to stop the cost of paying interest on these debts from absorbing ever more of the public budget?
  • Will inflation rear its head again?

Stephanie Kelton is a leading light in modern monetary theory — an increasingly popular view in US leftwing circles. She is professor of economics and public policy at Stony Brook University and the former chief economist on the US Senate’s budget committee.

Fundamental to her latest book, The Deficit Myth, is the idea that the US — and other “monetary sovereigns” like the UK, Japan, Australia and Canada — act like currency issuers rather than currency users.

Currency users must gather money before they spend it. You and I need to earn money or borrow it before we can buy goods and services, but the US government – a currency issuer – can simply spend money into existence: the Federal Reserve electronically credits bank accounts with brand new dollars. The government then taxes away the new money or exchanges it for US Treasuries, gathering back the tokens it creates.

Spending thus comes before tax and borrowing, not after. This means the usual worries about the state not being able to repay the national debt are meaningless.

Instead, the concern should be inflation: we know the government is spending too much when prices get out of control. The limits on its action are the real resources of the economy — workers, materials and so on. When they try to employ too many of these resources, their price will increase.

Kelton suggests a jobs guarantee funded by new money would act as an automatic stabiliser. When unemployment grows and inflationary pressure is lower, the government would create more money. This would be cut back as full employment is reached. Both supporters and critics of MMT love to portray it as a get-out-of-jail-free card, allowing left movements to sidestep the need for unpopular taxes.

Much of this could be enacted under the current regime of an independent, inflation-targeting central bank: for proof look to Germany, which has free universities and healthcare for all as well as an attachment to fiscal prudence.





Can governments afford the debts they are piling up?

May 4, 2020

In the Financial Times an economist and a financial historian debate the long-term viability of the Covid-19 rescue packages  – an issue which is concerning many thoughtful members of the public.

Stephanie Kelton is professor of economics and public policy at the State University of New York and a former chief economist on the US Senate Budget Committee. Last year she was on Bloomberg’s list of the 50 people most influential on global markets. Her forthcoming book is “The Deficit Myth”.

“Yes” says Professor Kelton: “While public debt can create problems in certain circumstances, it poses no inherent danger to currency-issuing governments, such as the US, Japan, or the UK. This is not, as some argue, because these countries can currently borrow at very low cost, or because a strong recovery will allow them to grow their way out of debt”. She gives three reasons:

  • First, a currency-issuing government never needs to borrow its own currency.
  • Second, it can always determine the interest rate on bonds it chooses to sell.
  • Third, government bonds help to shore up the private sector’s finances.

“No” says Edward Chancellor, a financial historian, journalist and investment strategist. In 2008, he joined Grantham, Mayo, Van Otterloo’s asset allocation team. He is the author of a forthcoming history of interest.

He believes that governments can print money to cover their costs only as long as the public retains confidence in a currency. When the crisis passes, the excess money must be mopped up, but politicians are unlikely to raise taxes in time to nip inflation in the bud. Though bonds can be issued to withdraw money from circulation, once inflation is under way, bondholders demand higher coupons (the amount of annual interest paid by the bond’s issuer to the bondholder).

Others would argue that, as new money is created at the stroke of bankers’ pens – or the click of a computer key, when they approve loans (see Bank of England Quarterly Bulletin) money can be deleted in the same way.

Nick Boles who formerly served as MP for Grantham and Stamford, writes In a recent Financial Times’ article:

“The usual objection to printing money to pay for government spending is that it will unleash inflation. That would be true if the spending being financed were increasing the overall level of demand in the economy, and if markets expected the government to resort to monetary financing as a matter of course. Neither of these conditions holds true today”.

Martin Wolf (below) was a senior World Bank economist and Director of Studies at the Trade Policy Research Centre, in London. He joined the Financial Times in 1987, where he is associate editor and chief economics commentator. He agrees with Professor Kelton on this subject, writing in the FT:

“Our financial system is so unstable because the state first allowed it to create almost all the money in the economy and was then forced to insure it when performing that function . . .

“A maximum response would be to give the state a monopoly on money creation. A 2012 study by International Monetary Fund staff suggests this plan could work well. Banks could offer investment accounts, which would provide loans. But they could only loan money actually invested by customers. They would be stopped from creating such accounts out of thin air and so would become the intermediaries that many wrongly believe they now are”.

Wolf talks about the issue (from 8.37mins) in a very interesting videoed interview on Indian television which focusses on the global economic impact of the coronavirus.





2,700 branches of a government-owned Bank of the Poor are being built by order of Mexico’s new president

February 8, 2020

Ellen Brown reported in a recent article that, at a press conference on Jan. 6, Andrés Manuel López Obrador said the neoliberal model had failed; private banks were not serving the poor and people outside the cities, so the government had to step in. 

Andrés Manuel López Obrador, Mexico’s president

Thomas Attwood would have rejoiced at President Obrador’s words to a local group in December, explaining that he was setting up a Bank of the Poor to reach 13,000 branches, more than all the private banks in the country combined.

At a news conference on Jan. 8, he said: “There are more than 1,000 municipalities that don’t have a bank branch. We’re dispersing [welfare] resources but we don’t have a way to do it.  . . .  People have to go to branches that are two, three hours away. If we don’t bring these services close to the people, we’re not going to bring development to the people. … They’re already building. I’ll invite you within two months, three at the most, to the inauguration of the first branches because they’re already working, they’re getting the land … because we have to do it quickly”. Digital banking will also be developed.

The president said the 10 billion pesos ($530.4 million) needed to build the new branches would come from from federal savings from other programs and that five million had already been transferred to the Banco del Bienestar.

The bank’s operating expenses will be covered by small commissions paid on each transaction by customers, most of whom are welfare recipients. Branches will be built on land owned by the government or donated, and software companies have offered to advise for free.

López Obrador says that his goal is to construct a “new paradigm” in economic policy aiming not only to increase gross domestic product but also to improve human welfare.

Read more about the good plans made by President Obrador – who has been compared with Jeremy Corbyn – on the Watershed website.









CREDEX, a community currency, is being launched in Birmingham’s Jewellery Quarter

October 19, 2019

Malcolm Currie, who often attended the Bromsgrove Group, has drawn attention to the Birmingham chapter of Green Drinks, which started in 1990, is active in over 500 cities worldwide, listed here and is fundamentally about face to face interaction.

On Tuesday 17th September, a Green Drinks session focussed on CREDEX, a community currency being launched in the Jewellery Quarter, at the LOCANTA RESTAURANT, 31 LUDGATE HILL, ST PAUL’S SQUARE. B3 1EH. The usual arrangements for Green Drinks applied and readers may see further information, on its website, by looking up the name of their nearest town.

The session featured Stuart Bowles’ introduction to CREDEX, an alternative/community currency.

The origin of this credit based system is the SARDEX currency of Sardinia. Turnover of this B2B system, amongst Sardinian SMEs, was €81million in 2017. Read more here.

The system has been adopted by eleven of mainland Italy’s regions, each region establishing its own local variant. This is a genuine “bootstrap” currency, which promotes the local, encourages innovation, supports moves toward sustainability. See the CBS article here.

It is a wholly credit based system; requires no capital or national currency loans to start trading; bears no interest; has no dependency on external funding.

Those attending learnt how this currency will operate in the Jewellery Quarter and how to get involved in developing it further.

CONTACT: Malcolm Currie, Globally Local,





What will save the day if the current global trade recession turns into something more pernicious?

August 4, 2019

A new book by the economist *Frances Coppola makes the case for a ‘people’s QE’.

She argues that directing money to ordinary people and small businesses is the fairest and most effective way of restoring crisis-hit economies and helping to solve the long-term challenges of ageing populations, automation and climate change. The central bank would finance the transfers by creating electronic money, as it does with QE.

She reminds us that the Australian government sent millions of households money during the 2008 financial crisis and avoided recession. See the Sydney Morning Herald. The transfers included:

  • pre-Christmas payments of $4.8 billion for pensioners,
  • $3.9 billion in support for families
  • and $1.5 billion for first-home buyers

Other central banks created trillions of dollars of new money but poured it into financial markets

‘Quantitative Easing’ (QE) was supposed to prevent deflation and restore economic growth. But the money didn’t go to ordinary people: it went to those who didn’t need it – big corporations and banks – the same banks whose reckless lending caused the crash. This led to a decade of stagnation, not recovery. QE failed.

Would a people’s QE succeed?



*Frances Coppola is an alumnus of Cass Business School, studying for an MBA with a specialism in finance and risk management. She then spent 17 years working for various banks, from large to small, retail and investment banks.





Reinterpreting money – Podcast 4: a growth-neutral financial system

June 21, 2019


Feasta (the Foundation for the Economics of Sustainability) has produced a new podcast series, Beyond the Obvious, which is co-organised by Feasta and the European Health Futures Forum

In the introduction to the 2008 Feasta Annual Lecture, our late friend and colleague Richard Douthwaite describes the link between our current debt-based money system and economic growth. He explains how joining the euro and the loosening of lending restrictions allowed Ireland to live significantly beyond its means, based on ever increasing private debt.



Beyond the Obvious: Podcast 4: Reinterpreting money begins with a brief excerpt from Richard’s introduction. This is followed by a discussion with Mary Mellor, Emeritus Professor at Northumbria University, who has published extensively on alternative economics and Graham Barnes, a currency innovation strategist and co-organiser of Feasta’s currency group (duration approximately 27 minutes)

As Greta Thunberg has observed, ‘green growth’ isn’t a realistic option in an economy that is hitting against resource limits and severe ecosystem degradation. So we need to think hard about how to transition to a growth-neutral financial system.

Topics covered in this podcast include the role that debt-free money has played historically, money as a commons, sufficiency provisioning to ensure everyone’s needs are meant within ecological constraints, participatory budgeting, myths about the role of the market in the economy, and complementary currencies.