From commodity standard to deposit standard: the near completion of a secular cycle in monetary globalization

Information
Title: From commodity standard to deposit standard: the near completion of a secular cycle in monetary globalization
Issue: Vol. 8, No 1, 2015
Published date: 20-05-2015 (print) / 20-05-2015 (online)
Journal: Journal of International Studies
ISSN: 2071-8330, eISSN: 2306-3483
Authors: Tudor Gherasim Smirna
Keywords: Central banking, monetary standards, zero lower bound, negative interest rates
DOI: 10.14254/2071-8330.2015/8-1/9
DOAJ: https://doaj.org/article/c40f04dbaf3e444383fb292bbb85333d
Language: English
Pages: 107-113 (7)
JEL classification: F42
Website: http://jois.eu/files/JIS_Vol8_No1_Smirna.pdf
File https://www.jois.eu/files/JIS_Vol8_No1_Smirna.pdf
Abstract

The advent and international proliferation of unconventional monetary policy is the logical consequence of interventionism in the monetary and banking field. It was made necessary by central bank policies of managing and constantly lowering the interest rates. Once the zero lower bound is reached, the next logical step for the monetary authorities is to look for ways to continue lowering rates through it. To abolish cash and institute the exclusive use of bank deposits is one enticing proposal to overcome this limitation. Thus, the potency of monetary policy can be preserved by the new capacity of charging negative nominal interest rates. However, the arguments against cash are not new. We are going to show in this paper that the same arguments that were previously used to impose banknotes are today used to forbid them.