Philippe Bacchetta, 02 May 2018

The proposed Swiss sovereign money initiative, which will be put to a popular vote in June 2018, would be a drastic reform to the monetary system. If implemented, all sight deposits in Swiss francs would come off commercial bank balance sheets and be deposited at the Swiss National Bank. This column argues that the initiative ignores most of what we know about macroeconomics or monetary economics. It would generate an aggregate loss, reduce stability, interfere with fiscal and monetary policy, and undermine the independence of the central bank. 

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