The Belfast Telegraph reports Toby’s efforts to deliver “Big banking lessons from little Presbyterian Mutual“:
Investors at the Presbyterian Mutual Society are the only depositors in the UK likely to lose personal savings as a result of the banking crisis.
The organisation, which operated under an FSA exemption intended for credit unions in Northern Ireland, does not benefit from a Government guarantee scheme which protected savers’ money and put an end to the run on Northern Rock.
When customers attempted to withdraw £50m during the height of the banking crisis in October 2008, the PMS paid out £21m before entering administration in order to safeguard its remaining reserves, which totalled, by that stage, just £4m.
As the Northern Ireland Executive and the Government at Westminster wrangle over responsibility for the crisis, a charity and pressure group, formed to promote the principles of honest money, has formulated a plan which could refund the society’s savers, without necessitating a bailout at public expense.
The Cobden Centre, spearheaded by seafood entrepreneur Toby Baxendale, is keen to see the Bank of England issue new notes and coins to PMS investors who currently cannot access their money. Any inflationary effect would be mitigated by erasing deposits and allowing the Government to recover the society’s investments, to set against the national debt.
As the article hints, this measure is not inflationary. The inflation already happened when demand deposits were loaned. This measure is anti-deflationary. Think of it as a just and fair version of QE based on sound property rights.