Swiss voters dismissed a radical proposal to overturn one of many monetary system’s core tenets.
The so-called sovereign cash initiative, or “Vollgeld,” would have ended the system of fractional reserve banking that’s been round for hundreds of years by permitting solely the Swiss National Bank to “create” cash. But 75 p.c of voters rejected the measure, in response to a projection from Swiss tv SRF. Official outcomes of the plebiscite are due afterward Sunday.
“Of course we’re happy,” mentioned Heinz Karrer, president of enterprise foyer economiesuisse.
“A large majority of the population didn’t want to go for such an experiment.”
While polls had recommended “no” was doubtless, the actual fact supporters had been capable of muster the 100,000 signatures vital to place it on the poll is testomony to the continued distaste concerning the monetary business nonetheless palpable a decade after the monetary disaster. While that was sparked by the collapse of Lehman Brothers, Switzerland didn’t escape, and was pressured in 2008 to bail out UBS, its largest financial institution.
Proponents of Vollgeld argue that by placing the central financial institution solely accountable for steering the sum of money within the economic system, there could be extra safeguards to stop the type of asset worth bubbles that triggered the 2008 monetary disaster. While the motion has gained essentially the most prominence in Switzerland, because of its system of direct democracy, it has additionally discovered favor in different nations, equivalent to Germany and the U.Okay.
“It was a pragmatic proposal to make the currency system better,” mentioned Reinhold Harringer, a supporter of the measure.
Yet critics, notably the Swiss authorities and the SNB, campaigned in opposition to the plan, saying it may cripple the economy and politicize financial coverage.
Plebiscites and referendums are a key function of Switzerland’s custom of direct democracy, with votes on all kinds of subjects starting from license charges for the general public broadcaster to immigration quotas and even public defenders for mistreated animals happening a number of occasions a 12 months.
“This is basically trying to do away with one of the major types of instruments that we’ve seen in banking for hundreds of years,” mentioned Martin Brown, a professor on the University of St. Gallen. Had the measure handed, banks would’ve confronted adjusting their enterprise fashions and “look for funding from other sources,” he mentioned.
(Updates projection in second paragraph.)