Only 1 in 10 MPs understand that 97% of money is created by banks.
Our new poll results reveal that only 1 in every 10 MPs understands that 97% of our money is created by the same banks that caused the financial crisis.
Until they understand this, they’ll never find understand problems like debt, inequality and unaffordable housing.
Please email your MP to ask them if they understand how money is created. (We’ve already written a template letter for you.)
MPs lack basic knowledge about the fundamentals of money, leaving them ill-equipped to understand the impending dangers of another house price boom or a second credit bubble, according to an exclusive Dods Monitoring poll commissioned by Positive Money, the campaign body calling for fundamental reform of our money and banking system.
When asked questions about who creates the nation’s money in the UK, nearly three quarters got the wrong answer. 71% of MPs believed that only the government has the power to create money. In reality, the government now only creates coins and notes, which make up just 3% of all the money in the economy. The other 97% of money exists as bank deposits – the electronic numbers in your bank account). This type of money is created by high-street banks – not by the government.
Just over 1 in 10 MP accurately understood that banks create new money every time they make a loan, or that money is destroyed whenever individuals or businesses repay loans.
Ben Dyson, founder of Positive Money, said: “MPs have no chance of understanding the house price bubble unless they know these basic facts about money. The financial crisis was caused by banks that created too much money and lent it recklessly. We’re now in danger of repeating the same mistakes.”
It is essential that MPs understand that the power to create money has shifted to the same banks that caused the financial crisis. We’re launching a campaign to educate MPs about the way money is created, and why it matters.