Rt. Hon. Reginald McKenna (one time Chancellor of the Exchequer in Britain)

I am afraid the ordinary citizen will not like to be told that the banks can, and do, create and destroy money. The amount of money in existence varies only with the action of the banks in increasing or decreasing deposits and bank purchases. We know how this is effected. Every loan, overdraft or bank purchase creates a deposit, and every repayment of a loan, overdraft or bank sale destroys a deposit.

University of Southampton School of Management

The report below was a joint submission to the Independent Commission on Banking by:

• PositiveMoney.org.uk,
• The New Economics Foundation (NEF) and
• Professor Richard A. Werner - DPhil (Oxon), BSc (Economics, LSE) from the Centre for Banking, Finance and Sustainable Development at the University of Southampton School of Management.

This report details the current malaise of our financial system and the remedy that is within easy reach.

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