100% reserve banking

Indeed, although the collapse of Barings was quite a special case where a single employee successfully managed to bankrupt his employer!  However, the number of banks either acquired or bankrupted during the most recent financial crisis commencing in 2007 is quite considerable:-http://en.wikipedia.org/wiki/List_of_banks_acquired_or_bankrupted_during_the_2007%E2%80%932012_global_financial_crisis#AcquisitionsWhilst in the US the list of just the largest bank failures, over a longer period, is equally if not more spectacular.http://en.wikipedia.org/wiki/List_of_largest_U.S._bank_failures

This article on the 1907 banking crisis written on the eve of the establishment of the Fed Reserve, made interesting reading…definitely a feeling of deja vuhttp://www.marxists.org/archive/sanial/1913/general-bankruptcy.htm"Of course, the purchasing power of the plutocracy had not been reduced, and that class continued in its wasteful habits of luxury. Of the middle class the purchasing power had at first been somewhat affected, but with the recovery of prices its ability to consume was fully restored while its further ability to accumulate surplus profits, though less than formerly, became again an important factor. The whole burden of the crisis fell upon the wage-working class. Its purchasing power, even at its highest, is always very small as compared with the total product of the country. It had been steadily reduced by the rise of prices in the later years of capitalist prosperity. It was now further reduced by enforced idleness. ""In the natural course of capitalist development the Banking Power obtained supreme command over the activities of the nation. In that elevated position it lost all sense of economic responsibility, public duty and moral principle. For the purpose of illicit gain it diverted the immense wealth in its keeping from the beneficent channels of production into the maleficent channels of speculation…Unscrupulous in all its methods, it has corrupted the public powers and made them the instruments of its despotism. In its rough ride over the nation, it has, however, reached a point where it must fall under the weight of its iniquities. Nothing can save it from the consequences of its misdeeds. Its collapse is inevitable. Shall the people — the working people — allow themselves to be buried in the ruins of the banking structure? In their own hands lie the means of their own salvation. The last day of the Banking Power should be the last day of the Capitalist System and the first day of the Socialist Commonwealth."Sadly the system continued to stagger from one crisis to another. 

Shadow Banking"Let’s explain: When a bank issues a mortgage, it is required to hold a certain amount of capital against the loan in case of default. But if the bank securitizes the mortgage, that is, it chops the mortgage up into tranches, pools it with other mortgages, and sells it as a bond (mortgage backed security), then the bank is no longer required to hold capital against the asset. In other words, the bank has created money (credit) out of thin air. This is the ultimate goal of banking, to maximize profits off zilch capital.So how is this different than counterfeiting?There’s no difference at all. The banks are creating “near money” or what Marx called “fictitious capital” without sufficient resources, without supervision, and without any regard for the damage they may inflict on the real economy when their ponzi-scam blows up. What matters is profits, everything else is secondary."http://www.counterpunch.org/2012/11/28/shadow-banking/Where is he wrong?

Yes, the "Christian Council for Monetary Justice" has been spreading their ideas in the Occupy Movement, particularly through Quaker (and Labour Party member) John Courtneidge who we clashed with at one of the recent New Putney Debates. Their chairman, Cannon Peter Challen, was one of the panel at a meeting organised by the Occupy at the Bank of Ideas last January. He was one of those who refused to describe himself as anti-capitalist. Basically, they are against interest, which they denounce as "usury", but not against any other aspects of capitalism, as if capitalism could function without interest.Their President is Labour MP Austin Mitchell, one of two openly currency-crank MPs. The other is Tory Douglas Carswell.

Two more items to add to the file.First, there was an article in yesterday's London Evening Standard by Anthony Hilton entitled "Peer-to-peer lending is here to stay" which opens:

Peer-to-peer lending is not lords lending to each other. It's people with savings lending directly to people or businesses who want money without going through the intermediary of a bank. Note the way Hilton automatically assumes that banks are intermediaries that lend other people's savings.Second, is a report in today's Metro on a study by the New Economics Foundation which claims that the lower interest rates at which the Big Four banks can borrow money because they are considered as too big to fail (and so will be bailed out by the government) amounts to a subsidy of £34bn from "taxpayers". Actually, this is not really a subsidy but a notional figure based on what these banks would have to pay in higher interest on what they borrow if they were not considered too big to fail. Coming from the NEF (which has published a booklet Where Does Money Come From? which endorses the view thar banks can create credit out of nothing by a mere keyboard stroke), one of the criticisms they make of this is curious as well as revealing. Metro reported:

So, when it comes down to it, the NEF accept that banks do need to borrow the money they lend, whether short-term from the more risky money market or from customer deposits. They can't have it both ways: arguing that banks can create money to lend from nothing and arguing that they have a privileged access to the funding they need for their loans.

Another banks create money article. "In fact most money is created by private banks, through the process of offering loans"http://www.countercurrents.org/alexander060113.htmBut pushes LETS, Brixton and Bristol £ and Time Banks.Although we have responded to many of those directly perhaps it is time to have a dedicated online pamphlet quickly disseminated to counter such articles.

With talk of the trillion dollar coin being produced in the US to deal with their deficit i came across this bit of trivia. The existence of £1 million pound  and £100 million notes.http://www.bbc.co.uk/news/magazine-21145103Apparently they are to provide backing to the Scottish and Northern Irish bank-notes. For every pound an authorised Scottish or Northern Irish bank wants to print in the form of its own notes, it has to deposit the equivalent amount in sterling with the Bank of England. If one of the banks failed as they nearly did a few years ago, the Scots notes would still hold its value.The high value notes are kept for accountancy purposes which seems to me indicates that even the Bank of England does not rely on strokes of a key-board or entries in a written ledger when it comes to the creation of money !!

What next? They're thinking of introducing "negative interest rates":http://www.bbc.co.uk/news/business-21589128This was tried in Japan but didn't work. They seem be running around like headless chickens clucking at straws.