Making Money from Making Money: Seigniorage in the Modern Economy

Laurie Macfarlane, Josh Ryan-Collins, Ole Bjerg, Rasmus Hougaard Nielsen, Duncan McCann

Research output: Book/ReportReportResearchpeer-review

Abstract

Who has control over the supply of new money and what benefits does it bring? There is now widespread acceptance that in modern economies, commercial banks, rather than the central bank or state, create the majority of the money supply. This report examines ‘seigniorage’ – the profits that are generated through the creation of money. We show that in the UK, commercial bank seigniorage profits amount to a hidden annual subsidy of £23 billion, representing 73% of banks’ profits after provisions and taxes.
Who has control over the supply of new money and what benefits does it bring? There is now widespread acceptance that in modern economies, commercial banks, rather than the central bank or state, create the majority of the money supply. This report examines ‘seigniorage’ – the profits that are generated through the creation of money. We show that in the UK, commercial bank seigniorage profits amount to a hidden annual subsidy of £23 billion, representing 73% of banks’ profits after provisions and taxes.
LanguageEnglish
Place of PublicationLondon
PublisherThe New Economics Foundation
Number of pages43
StatePublished - 2017

Cite this

Macfarlane, L., Ryan-Collins, J., Bjerg, O., Hougaard Nielsen, R., & McCann, D. (2017). Making Money from Making Money: Seigniorage in the Modern Economy. London: The New Economics Foundation.
Macfarlane, Laurie ; Ryan-Collins, Josh ; Bjerg, Ole ; Hougaard Nielsen, Rasmus ; McCann, Duncan. / Making Money from Making Money : Seigniorage in the Modern Economy. London : The New Economics Foundation, 2017. 43 p.
@book{68522159119f4f13bdd72518d27638a1,
title = "Making Money from Making Money: Seigniorage in the Modern Economy",
abstract = "Who has control over the supply of new money and what benefits does it bring? There is now widespread acceptance that in modern economies, commercial banks, rather than the central bank or state, create the majority of the money supply. This report examines ‘seigniorage’ – the profits that are generated through the creation of money. We show that in the UK, commercial bank seigniorage profits amount to a hidden annual subsidy of £23 billion, representing 73{\%} of banks’ profits after provisions and taxes.",
author = "Laurie Macfarlane and Josh Ryan-Collins and Ole Bjerg and {Hougaard Nielsen}, Rasmus and Duncan McCann",
year = "2017",
language = "English",
publisher = "The New Economics Foundation",
address = "United Kingdom",

}

Macfarlane, L, Ryan-Collins, J, Bjerg, O, Hougaard Nielsen, R & McCann, D 2017, Making Money from Making Money: Seigniorage in the Modern Economy. The New Economics Foundation, London.

Making Money from Making Money : Seigniorage in the Modern Economy. / Macfarlane, Laurie; Ryan-Collins, Josh; Bjerg, Ole; Hougaard Nielsen, Rasmus; McCann, Duncan.

London : The New Economics Foundation, 2017. 43 p.

Research output: Book/ReportReportResearchpeer-review

TY - RPRT

T1 - Making Money from Making Money

T2 - Seigniorage in the Modern Economy

AU - Macfarlane,Laurie

AU - Ryan-Collins,Josh

AU - Bjerg,Ole

AU - Hougaard Nielsen,Rasmus

AU - McCann,Duncan

PY - 2017

Y1 - 2017

N2 - Who has control over the supply of new money and what benefits does it bring? There is now widespread acceptance that in modern economies, commercial banks, rather than the central bank or state, create the majority of the money supply. This report examines ‘seigniorage’ – the profits that are generated through the creation of money. We show that in the UK, commercial bank seigniorage profits amount to a hidden annual subsidy of £23 billion, representing 73% of banks’ profits after provisions and taxes.

AB - Who has control over the supply of new money and what benefits does it bring? There is now widespread acceptance that in modern economies, commercial banks, rather than the central bank or state, create the majority of the money supply. This report examines ‘seigniorage’ – the profits that are generated through the creation of money. We show that in the UK, commercial bank seigniorage profits amount to a hidden annual subsidy of £23 billion, representing 73% of banks’ profits after provisions and taxes.

M3 - Report

BT - Making Money from Making Money

PB - The New Economics Foundation

CY - London

ER -

Macfarlane L, Ryan-Collins J, Bjerg O, Hougaard Nielsen R, McCann D. Making Money from Making Money: Seigniorage in the Modern Economy. London: The New Economics Foundation, 2017. 43 p.