Switzerland is voting on a radical change to the way banks work this weekend

And you thought you had the most fun weekend plans.

We're still rocking from the one measly referendum we had – Switzerland, on the other hand, are pros, averaging nine a year. They're having one this Sunday, and it's on a pretty radical proposal about money and banks.

What it means: Warning: this gets economics-y. Most banks work by 'fractional reserve banking' – which basically means as long as they still hold a 'fraction' of what people have deposited in their bank as a 'reserve' (geddit), they can make loans totalling way more than they've actually got (with a nice chunk of interest on top).

That works out just fine as long as a) they keep tabs on it all, b) they make sure not to lend loans of money they don't have to people who can't pay it back and c) people don't all come back and ask for their deposits at once.

Sadly, all of the above sometimes goes wrong, and it gets 2008-crash-style ugly. Campaigning groups in Switzerland want a new system, where banks are only allowed to lend out as much as they hold in deposits, what they get from trading stocks and shares (i.e. parts of a business), or what the central bank gives them.

The only people who could 'create' money by making loans with cash they don't have would be the central bank (like the Bank of England over here).

All the big dogs are against it in Switzerland – parliament, banks (obviously), and even the central bank itself. They say it won't solve the problems that cause crashes because people can still act irresponsibly within this new system.

Also – at the moment, central banks observe, among other things, whether people are taking out loans from private banks and change interest rates accordingly: but if they become the place people go to do that, they're not so neutral anymore, and it could all get very political.

It doesn't look like the referendum will pass – latest estimates say 54 per cent against and 34 per cent pro. But it has led to a pretty sophisticated debate in Switzerland about what money is and how banks should work (one which we'd do well to have over here at some point too).

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