for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Banks

Swiss government rejects 'sovereign money', national law initiatives

Swiss Finance Minister Ueli Maurer arrives to attend a news conference on an initiative for 'sovereign money' that would pin sole responsibility for creating money on the Swiss National Bank in Bern, Switzerland November 9, 2016. REUTERS/Ruben Sprich

ZURICH (Reuters) - The Swiss government on Wednesday rejected an initiative for “sovereign money” that would pin sole responsibility for creating money on the Swiss National Bank, as well as a proposed move to give the constitution priority over international law.

The government said the “sovereign money” proposal to end fractional-reserve banking would complicate the SNB’s monetary policy and put the Swiss economy at risk.

“Switzerland would become a guinea pig for untested reforms,” the government said in a statement, adding such a profound transformation of the monetary system would carry substantial risks and could lead to economic upheaval.

The initiative was the idea of a group called Monetary Monetization that says the banking system would become more secure if banks were no longer allowed to create “electronic money” that makes up most bank accounts.

The government also rejected another initiative, spearheaded by the far-right Swiss People’s Party (SVP), that aims to give the Swiss constitution priority over international law.

“Accepting the “Swiss Law, Not Foreign Judges” initiative would lead to legal uncertainty and harm the Swiss economy,” the government said in a separate statement, adding it would also undermine Swiss foreign policy.

Switzerland is currently struggling to implement another SVP initiative - a 2014 vote to curb immigration because it contradicts bilateral treaties with the European Union on the free movement of people.

Reporting by Silke Koltrowitz; editing by Mark Heinrich

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up