Making Money from Making Money: Seigniorage in the Modern Economy

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

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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.
Original languageEnglish
Place of PublicationLondon
PublisherThe New Economics Foundation
Number of pages43
Publication statusPublished - 2017

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