Written by John Lounsbury
This week we have a 2013 presentation by Michael Kumhof, then with the IMF and now with the Bank of England. Dr. Kumhof discusses what is has been referred to as the “Chicago Plan” for banking and now is more often referred to as “100% reserve banking”. As Kumhof describes, this type of system separates depository banking from investment banking and forms a system which has many of the elements that exist in public banking systems.
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From Wikipedia:
Michael Kumhof (born 15 October 1962) is a German researcher and economist. He is the senior research advisor in the Bank of England’s research hub.[2] He is most known for his research into the financial system, income inequalities and the oil supply.
In his previous work at the IMF, he was responsible for developing the International Monetary Fund‘s Global Integrated Monetary and Fiscal Model (a Dynamic stochastic general equilibrium model). The model is used for IMF policy and scenario analyses in multilateral and bilateral surveillance, for the World Economic Outlook, and for G20work. It is also used by several central banks. [1]
As a researcher, one of Kumhof’s most noticed publications is probably the IMF working paper The Chicago Plan Revisited, in which he and co-author Jaromir Benes use modern tools to analyse the Chicago plan, a collection of banking reforms suggested by University of Chicago economists in the wake of the Great Depression. It has been called IMF’s epic plan to conjure away debt and dethrone bankers. [3]
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Note: Michael Kumhof has contributed to GEI:
