Douglas Carswell's Blog

Banking Reform Bill

Last week, I put forward a Bill in the House of Commons aimed at strengthening our system of banking.  After the credit boom-then-bust, I hope you'll agree that some changes are needed.

An incremental measure, my Bill would allow a gradual move towards a new legal basis for banking; one that ensures banks respect the fact that it is not actually their money they issue credit against - but yours.

Enforcing individual property rights against corporatist bankers isn't just a consumer protection measure.  It would also help prevent the kind of ruinous credit cycle, which will cost every citizen so dear in higher taxes and a devalued currency. 

Naturally, lots of the "experts" - many of whom have sat unchallenged in their field for decades - hate it.  But then it's not as if they saw the credit crunch coming .....

UPDATE:  Some of those who've listened to my proposal have suggested that my Bill won't work.  Some because they don't seem to like a new idea - which is fair enough.  That's human nature. 

Others object either on the basis that I'm forcing people to have bank accounts that they'd be charged for, or that this would result in massive change to the banking system.

First of all, I'm not forcing anyone to do anything.  All I do is allow two distinct status of bank deposits to exist.  Banks may well charge for accounts if they weren't allowed to create a mountain of credit against your deposit.  But how do you think banks make their money today?  It's naive to think we aren't subject to all manner of hidden charges as it is.

Second, my proposal is incremental.  All I seek to do is allow a new legal status for certain types of account.  Let's then see if customers prefer it ..... 

Who knows, the idea of honest money might catch on?  I think it beats the system we have today that allows state-run banks to privatise their profits but socialise their losses.  

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