100% reserve banking

According to Positive Money a referendum will eventually take place in Switzerland on their proposal for banking and monetary reform:http://positivemoney.org/2015/11/swiss-citizens-initiative-collects-105000-signatures-triggers-referendum-on-money-creation/Positive Money believe that banks, as part of the banking system including a central bank, can create money out of nothing  by a simple keyboard stroke and propose that this supposed power should be taken away from them and that they be allowed to lend only what has been deposited with them. But, as banks do not have that power and already have to fund what they lend (from borrowing on the money market as well from outside deposits), their proposal is unnecessary. It's aimed at dealing with a non-problem. If enacted it would make it more difficult for banks to fulfil their key role under capitalism of channelling otherwise unused money into business investment. This could slow down the accumulation of capital and so provoke an economic crisis.  They believe that their proposal would in fact reduce bank lending and propose to compensate for this by the state printing more money to be invested. But most of this will be over-compensation, resulting in inflation, massive inflation in fact.I don't suppose Swiss voters will fall for this. Not that monetary/banking reform will solve or even alleviate any of the problems workers face under capitalism; if ill-conceived, it could even make matters worse, at least temporarily until it is repealed.

This whole thing is ridiculous:

This is more or less what happens today !I think that what they are proposing is that banks should no longer be able to lend out money deposited in a current (as opposed to a savings) account. They'll just have to keep it as if they were a safe deposit service. That doesn't make sense from a capitalist point of view as it means that temporarily unused money won't be able to be channelled to those who want money to spend and are prepared to pay interest to borrow it.It is also likely to mean that banks will have to charge for storing people's current account money, i.e charges will go up. No more "free" banking. I imagine that this is what the opponents of the measure will be emphasising during the referendum campaign and could be a winner for them. We'll see.Strictly speaking, this is not currency crankism as the proposed measure is feasible, just silly.

Sort of. Nobody can spend what they don't have, whether their own or borrowed. Businesses including banks can't either. But of course there are differences between you and a bank. A bank aims to make a profit and practises double entry book-keeping.A bank's profit comes from the interest it charges (not all of it but what's left after it has paid its expenses including staff wages and interest on any money it has itself borrowed).Double entry book-keeping means that when a bank (or any business) acquires an asset or a liability this must be balanced, in the accounts, by a corresponding liability or asset. Thus, when a bank makes a loan this liability has to balanced by a corresponding entry in the asset column (the borrower's IOU to repay the loan). But nothing new has been created. This is just an accounting convention. That's all that the famous "stroke of a pen", or these days keyboard stroke, does.A better example would be if you were a moneylender, i.e if like a bank you lend money but your own money. You could even practise double entry book-keeping. But you would not be able to lend more money than you had. You could try but you would soon come unstuck and find yourself unable to honour a promise to pay someone money. The difference between a bank and moneylender is only that a bank is lending other people's money.Banks are essentially financial intermediaries, borrowing money at one rate of interest and relending it at a higher rate. Their economic role under capitalism is the useful one for capitalism of making available for investment and other spending purchasing power that would otherwise remain dormant.

I guess the restriction is whether or not the borrower has the ability to repay. Under the PM model of banking the bank only has to ensure their assets (the loan agreements) match their liabilities (deposits in accounts). If they start issuing dodgy loans to people and they get defaulted on then they are at risk at not being able to cover people wanting to withdraw their money.

This is the big question. I would borrow a million pounds from the "Bank of Thin Air", so suddenly they are "worth" a millon pounds. I might not be able to pay them back but presumably that won't be a problem as far as they are concerned.