An economist explains the fundamental flaw at the heart of Switzerland's revolutionary referendum on banking

• Martin Brown, a professor of banking at the University of St. Gallen, and former economist at the Swiss National Bank, explains the fatal flaw in the logic of Switzerland's banking reform referendum.
• "Most academic economists are very sceptical, not just about this vote, but about the whole campaign for monetary reform which goes in the direction of sovereign money," Brown told Business Insider.
• Swiss citizens will this weekend vote on an initiative called Vollgeld.
• The initiative essentially boils down to moving consumer deposits off the balance sheets of high street banks, and holding them instead with the Swiss National Bank (SNB), Switzerland's central bank.

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LONDON — A Swiss referendum to overhaul the country's financial system misunderstands how banks fail and won't make them safer, according to a leading academic.

On Sunday, a referendum will be held asking Swiss citizens if they back the introduction of a concept known as the sovereign money initiative, proposed by a group called the Vollgeld Initiative.

See the rest of the story at Business Insider

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SEE ALSO: Switzerland is about to vote on whether to send its financial system back to the Dark Ages in a referendum to ban banks from creating money

DON'T MISS: Here's how the Swiss plan to change the face of the global financial system would actually work

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