The campaign for interest-free money

Don Richards heads up Positive Money in Wellington. The Positive Money campaign began in the UK post 2018 GFC and campaigns to take money creation away from banks and place it with the Reserve Bank.

The Reserve Bank of New Zealand creates New Zealand’s coins and notes interest free (the same system is used the world over).

High Street banks use a system called Fractional Reserve Banking to lend out the money in its vaults many times over. In essence; banks lend out money it doesn’t have – some critics call it counterfeiting.

When a bank makes a loan it literally types the loan amount into your account. You spend it (say on buying a home); and once the loan is paid back the bank keeps the interest it charged you for the non-existent money, and deletes the original loan amount from its computer.

The idea that people only borrow money from savers via a bank is no longer the case.

The problem with banks charging interest on money that doesn’t exist is that all loans can never be paid off without taking 98% of ‘money’ (digital money) out of the system.

If the Reserve Bank of New Zealand could create interest free money (which it can) then that money can be used for public services (roads, schools, poverty reduction etc) without the government borrowing  money from the banks and using taxpayers’ cash to pay interest to the banks.

The only people who would lose would be the banks; they’d still survive because people would still need them, but they would not make quite as much profit.

Listen to the full interview with Don Richards (remember it was recorded in 2014).

See the UK’s


Steve Hart is a writer and podcaster.

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10 March, 2013