A radical plan to upend Switzerland’s financial landscape by barring commercial banks from creating money when they lend was heading for defeat, according to early projections on Sunday.
Some 74 percent of voters had rejected the so-called Sovereign Money initiative according to initial forecasts from Swiss broadcaster SRF. A final result is expected around 1500 GMT.
Concerns about the potential risks to the Swiss economy from introducing the system appear to have convinced voters to reject the proposals.
The initiative, called under Switzerland’s system of direct democracy after gathering more than 100,000 votes, wanted to make the Swiss National Bank (SNB) the only authority in the country authorised to create money in the country.
The plan, if accepted could have had repercussions beyond Switzerland’s borders by removing a practice which underpins most of bank lending in the world.
Contrary to common belief, most money in the world is not produced by central banks but is instead created by commercial lenders when they lend beyond the deposits they hold for savers.
Supporters said their plan would make the Swiss financial system more secure and the money in people’s accounts safe from bank runs.
But opponents, including the SNB, Swiss government and the banks, have said the plan was a dangerous experiment which could damage the Swiss economy.