Comments on: Correction: The WIR bank in Switzerland is not a mutual credit system!

By: John Rogers

John Rogers — Mon, 18 Nov 2013 15:28:45 +0000

Richard Logie, you know better than most what a ‘mutual credit’ system looks like in practice as you have run one for years. So did I. If the term is to have a common meaning, surely it must mean that each individual trader in a community of traders has the power to issue credit to other traders (subject to oversight and possibly credit limits set by the governing ‘bank’) whenever they wish.

It turns out that WIR is substantially different. New ‘credit’ can ONLY be issued by the WIR bank against personal guarantees just like a conventional bank loan. Currency brought into being by the bank against someone’s existing assets. No individual member trader has that power. So the issuance mechanism is completely different. Once these credits are ‘in circulation’, THEN it looks like a mutual credit system, as the bank simply acts as third-party record-keeper for people exchanging these credits with each other, just as in a B2B exchange network or LETS. But noone can run up a negative balance against ‘all the other members’ collectively, they legally ‘owe’ the entity of the bank itself and must eventually repay it directly. That seems like a different animal to me and we should name it as such.

WIR is still a pioneering system operating on a scale most other regional currencies can only dream of. Let’s learn what we can from them but be clear about what they really are: a conventional bank issuing loans in two parallel currencies, Swiss francs and WIR francs. In my mind, that does not make them ‘good’ or ‘bad’, just different from what many of us thought they were.

By: Richard

Richard — Sat, 07 Sep 2013 17:39:01 +0000

http://realcurrencies.wordpress.com/2012/04/19/the-swiss-wir-or-how-to-defeat-the-money-power
Note: long term loans @ 1% rates for mortgages

Conclusion
WIR is a leading example for the entire world. It has proven that interest free mutual credit can be offered on a large scale. Its superior management was a key factor to its success: it was not a couple of dreamers that built it, but down to earth businessmen understanding the issues and the solution.

By: Richard

Richard — Sat, 07 Sep 2013 17:13:20 +0000

I not sure there is a mistake it’s the WIR community that creates and back the credits yes it’s secured against property.
It is important to follow the source of money and how it is created how it is backed and how it is put into circulation and where it can be spent. WIR is a classic P2P mutual Credit clearing system with a centralised administrator providing governance.

http://www.swissinfo.ch/eng/business/Cash_substitute_greases_business_wheels.html?cid=7613810