An upcoming referendum in the wealthy Alpine nation of Switzerland could be set to dramatically transform the global banking industry. Swiss voters go to the polls Sunday to decide whether the country should switch to a so-called sovereign money system. The referendum is attracting international interest because of how it reflects debates held by economists and lawmakers in the aftermath of the 2008 global financial crash.
Supporters of the initiative, known as the “Vollgeld” or the Sovereign Money Initiative (SMI), say approving the measure would make the financial system safer by preventing bankers from recklessly lending and putting people’s savings at risk — again.
That’s because the change would make it much harder for commercial banks to extend credit, effectively creating cash. Instead, the Swiss National Bank (SNB) would become the monopoly provider of Swiss francs.