Solution to the financial crisis

The Chicago Plan

In august 2012 researchers from the IMF calculated a modern version of the ‘Chicago Plan’. A plan dating from 1930 for full reserve banking. At the time it was developed as a solution to the financial crisis of that time. Now it is being considered for use as a solution for the current financial crisis. The desired effects seem to be the end of national debt, a significant lessening of private debt and, in the long run, 10% more economic growth.

Knowledge and Experience

In may 2013 Ms.van Dixhoorn, representing the Sustainable Finance Lab (SFL), an initiative of Herman Wijffels, Peter Blom and Klaas van Egmond, contacted the B of Joy (BOJ). This was to discuss the feasibility, advantages and disadvantages of the Chicago Plan and to stimulate a public discussion about money (creation). The knowledge and experience of the BOJ was requested to help form a correct judgment of this international proposition and to offer alternative ideas.

Important points and solutions

In our downloadable Dutch report we give an account of what the Chicago Plan is. In short: this form of full reserve banking is an ‘administrative trick’, in the service of the old system. At the same time we describe the functions of money and the meaning of full reserve banking in the Chicago Plan. We describe extremely important points and solutions, with which we can innovate the financial system and  make it sustainable. Points that unfortunately are not mentioned in the Chicago Plan.

A truly sustainable system

The way our proposed 'new' system works is actually not so difficult to grasp. What we need for our system is an organization that in legal and administrative form looks like a cross between a shop and a bank. When we supply goods and services (labor) to this organization then money is created. When we demand goods or services (labor) from this organization then money is taken out of circulation. Want to know more?

> Download here our PDF report. ATTENTION: On this moment, the report is only available in Dutch. BOJ is a product of United People Foundation (UPF) which develops and promotes innovative (financial) products and services of, for and by the people.