“The Swiss rejected a proposal to introduce Vollgeld policies by an overwhelming 75% in yesterday’s referendum,” note Rabobank analysts.
Key quotes
“The idea underlying Vollgeld is that of full-reserve banking, a proposal that has been around since the 1930’s.”
“Today’s context makes full-reserve banking unwarranted and self-defeating, as its side-effects would most likely lead to instability and a deflationary tendency.”
“In the Swiss case, uncertainty would have prevailed in the short-term, followed by an increasingly conservative SNB and a further appreciating Swiss Franc, hurting the Swiss
economy.”
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