Banking

The UK operates on fractional reserve banking, where banks do not keep all your money and have the power to create credit through loans. This risks bank crashes when trust is lost in the system and provides constraints that make housing reforms more difficult. The following policies are to be implemented:

• Implement full reserve banking through the Bank of England crediting reserves to match deposits and putting the windfall of excess assets now held by banks under review. This is a temporary measure to ensure deposits are 100% safe during the implementation of a full reserve banking system.

• All bank deposits are backed by reserves and therefore retrievable in the event of the commercial failure of a bank.

• Expand central bank lending into a full central wholesale funding system, where the Bank of England creates credit to lend to private banks at an interest rate, to then lend to the consumer at margin.

• Mortgages operate under different rules. Mortgage lending is to be at 0%, with private banks earning money from mortgages through a £25 per month servicing fee and a one off 1% origination product fee at the beginning of the mortgage.

• Mortgages to be restricted to 3x single income to prevent credit inflation in housing and to be offered at 0% deposit subject to one year of full time income and/or rental history.