It's definitely a political site, one that would be very harmful to the global economy if it ever gained acceptance.
While banks "create" money when they lend on a mortgage they aren't really the places that are creating the value. That's whoever built the house. That increases the value of the country and the mortgage reflects that by issuing the corresponding amount of money into the economy, paying those in the house building supply chain for their work. Same for car loans and the like. If the banks weren't doing this the result would be deflation, a smaller pool of money for a larger value of goods than before. That's part of why there is normally a small positive inflation target for central banks, paying for the increase in assets added to society by companies and individuals carrying out their normal value-creating activities.
The BoE paper is worth a read. The site picks out just the bit that favours its view while not mentioning all of the constraints on whether and how much money a bank can create.
Remember for example that RBS and Northern Rock did not just magic up the money to keep going, they required a rescue because they were not able to just create money to save themselves. There are a wide range of constraints, from having to find borrowers to the regulation mandating certain levels of reserves, a form of reserve multiplier, which can be used to force banks to lend less, but not more. It's not a literal reserve multiplier becuase the amont of money needed depends on the specific borrowing - less for mortgages, more for 95% LTV mortgages, more for credit cards - and because the banks don't have to lend up to the limit of what they could lend. Just as consumers aren't compelled to borrow to the limit of their borrowing capacity. The constraints are illustrated in part by the way that banks have been closing credit card accounts or reducing limits recently. The unused limits require them to have a certain amount of reserve so they can increase their lending capacity or lower their reserve requirement by reducing the potentially usable credit. One incentive they have been given to do that is regularly increasing reserve requirements.
Natural enough that RebuildingSociety would support it, since their business model is based on destroying money. Where destroying has the BoE meaning: reducing the amount of money, which RS does by replacing bank loans with lent deposits. The repayment of the bank loan destroys the money that was created when it was made. Anything else that reduces borrowing also destroys money, including trivial things like paying a credit card bill.
Essentially their whole "We’re campaigning for the power to create money to be used in the public interest, in a democratic, transparent and accountable way, rather than by the same banks that caused the financial crisis" is a hard left socialist scam designed to trick those who don't know any better into thinking that somehow it is banks that are creating value rather than the rest of us with the banks just following what we do by creating the money to reflect the value of what we have already done.
In the past it would have been considered a hard left socialist campaign, read more about
their mission:
"It harms the environment: As depositors do not
get to decide how their money is used, environmentalists could find
themselves inadvertently funding activities that may be harming the
environment. There is also evidence to suggest that the current monetary
system is incompatible with a steady state economy.
Positive Money is supportive of ideas and policies which move towards
our end goal. However, we do believe that our end goal can only be
reached when the following three things have been achieved:
Prevent the private creation of money or money substitutes.Transfer the power to create money from the banking sector to a
democratic, transparent and accountable process working in the public
interest.Ensure that newly-created money is created by the state. This money
can either be spent into the economy free of corresponding debt.
Alternatively, if required, newly created money could be lent in, for on
lending into the productive sector."
Note that what really causes money to be created isn't depositors, it's borrowers who are choosing to buy things that the rest of us have created or who are borrowing for equipment and such to produce things. To control that requires central control of the economy in a communist model that tells us what we can do to create things. Also worth noting the objective of preventing growth of the economy, a steady state economy instead. Zero growth or negative growth is one of the far green agendas to make people worse off by reducing consumption. While they assert that they don't campaign for a bigger role for government, they plans to direct the economy require massive increases in government control of the economy, down to deciding which businesses should be able to buy new equipment by picking which are allowed to borrow to buy it.
They use lots of attractive buzzwords but their agenda isn't one that any democratic or capitalist society should support because it relies on transfer of power to government from the productive people and businesses.
