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Dissocier la création monétaire des prêts bancaires : retour sur la proposition « 100 % monnaie » des années 1930

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  • Samuel Demeulemeester

Abstract

The 2007-2008 global financial crisis has brought strong renewed interest in the ?100% money? reform proposal, inherited from the 1930s, which aims at divorcing money creation from bank loans by imposing 100% reserves on checking deposits. This reform idea, however, is frequently subject to confusion, being sometimes likened to the idea of abolishing bank intermediation, sometimes to that of setting up a currency board, or yet mistaken for the more recent ?narrow banking? proposal. For this reason, this article offers to clarify its concept and objectives, by revisiting the works of the authors of this proposal in the 1930s?Henry Simons, Lauchlin Currie and Irving Fisher in particular. After briefly recalling the history of the ?100% money? idea, I present its main arguments, and then discuss its implications for the payment system, bank intermediation, and the institutional framework of money issuance. I conclude on the importance of a conceptual clarification of this reform idea in respect of the ongoing discussions about it. Classification JEL: B26, E42, E59

Suggested Citation

  • Samuel Demeulemeester, 2022. "Dissocier la création monétaire des prêts bancaires : retour sur la proposition « 100 % monnaie » des années 1930," Revue d'économie politique, Dalloz, vol. 132(5), pages 835-859.
    • Handle: RePEc:cai:repdal:redp_325_0835
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    Keywords

    100% money; money creation; Irving Fisher; Chicago Plan; narrow banking;
    All these keywords.

    JEL classification:

    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other

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