A positive system of money and banking must:
- not create excessive debt
- be counter-cyclical (or neutral) rather than pro-cyclical
- support the productive economy, rather than simply extracting wealth from it
- not trigger asset price bubbles through positive feedback loops
- require no government support (including explicit and implicit guarantees, deposit insurance, or bailouts)
- allow badly managed banks to go bust or be taken over by more successful banks
- be inherently stable and self-regulating (rather than being inherently unstable)
- ensure that businesses and entrepreneurs are able to get credit to implement their ideas
- not require manipulation of interest rates, and allow interest rates to be set by the markets
- not require any subsidies, whether indirect (deposit insurance) or hidden (such as the privilege of the banks to create the money supply and collect interest on every pound of bank deposits)
- the payments system should be insulated from investment activities, so that failed investments and insolvency of a bank does not threaten the payment system (and so that no bank can be ‘too big to fail’ or ‘too systemic to fail’)
- users of the banking system should be able to see how much risk they are really taking, and have access to investment products that meet their preferred risk profile and ethical principles
- private interests (including banks) should not be able to devalue money for their own benefit;
- if new money is created, the benefit of creating that new money should be spread as widely as possible, rather than going to a concentrated group of people or companies
