A radical transformation plan of the financial system in Switzerland that would bar commercial banks from creating money electronically when lending was rejected resoundingly by voters there on Sunday.
Over 75% of voters rejected the Sovereign Money initiative showed official results released Monday by the Swiss government.
Each of the self-governing cantons in the country also voted no in the poll that needed a majority from the 26 cantons along with a simple majority from voters to be successful.
The concerns over the possible risks to the economy in Switzerland through introducing real money or “vollgeld” systems appeared to be the convincing factor that voters rejected the bid.
The government, which opposed the plan due to uncertainties it might unleash, said the results were pleasing by voters.
The Swiss Finance Minister said that implementing the plan would have raised too many questions that would have been hard to handle for several years.
The Swiss are generally people that do not take risks, and people have seen there is no benefit from that proposal.
The vote, which was called under the direct democracy system in Switzerland after it gained over 100,000 signatures, wanted the Swiss National Bank to be the only body that is authorized to create money.
Contrary to what most people think, the majority of money across the globe is not made by central banks, but instead is created electronically by the world’s commercial lenders when lending more than the deposits on hand for savers.
The arrangement, supported by beliefs that the vast majority of debts will be repaid, has been the worldwide capitalist system cornerstone, but opponents are saying it has become unstable due to new money that is created could exceed the economic growth rates, which would lead to bubbles of inflationary assets.
If the plan had been approved, Switzerland would have become the first nation worldwide to introduce that type of scheme, which led the plan’s opponents to call it a dangerous experiment that would hurt the economy.
Repercussions beyond the borders of Switzerland could have be experienced through removing the practice that is the underpin of the majority of the bank lending in the world.
Support grew for the reform following the economic crisis of 2008 with campaigners insisting that their ideas would make the Swiss banking system securer and protect the savings of the people from a possible bank run.