PSS VIRUS SPREADING OVER EUROPE
'Private Seigniorage Scam' awareness mapped by the Italian CENTRO STUDI MONETARI:
Reality: banks as the undisputed creators and allocators of the money supply
Banks’ primary function is far more important and more far-reaching for the economy. It remains a little-known and rarely highlighted fact that in most countries, including the EU, about 98% of the money supply is created by the banking system. Normally only about 2% of the money supply is created and allocated by the private EU central bank (ECB).
As Werner (2005) shows, the banks’ power to individually create money through the process of credit creation is based on the regulatory and accounting regime banks have opted for.
Currently, banks world-wide are allowed to individually create new purchasing power by simultaneously booking an asset and a liability when a new credit (‘loan’) is granted. Upon signing a contract, banks are allowed to add the amount of loan outstanding to the asset side of their balance sheet, while the borrower’s current account is credited with the same amount.
In this way, banks can create new deposits ‘out of nothing’, whenever they grant what is called a ‘loan’. In reality, they are creating credit (the loan) and money (the deposit account entry) simultaneously. It is this process that produces about 98% of the money supply in the EU economy.
http://leconomistamascherato.blogspot.com/2011/10/pss-virus-spreading-over-europe.html