Abstract
This thesis is about our monetary and financial system. It starts focusing on the monetary creation, which is the basis of our financial system. After defining the monetary creation process, it is about its control, which has been transferred from the States to the Central Banks to the commercial banks. It explores the reasons of this changes and the situation it created, particularly regarding the public debts that started at this time and which kept on growing ever since. After defining this problem, it explores the possibility for a Central Bank to finance the State's investments at zero interest rate, like it was the case when they had this right. This study will show that this model is viable, and would allow the collectivity to pay back the public debt and lower the taxes at the same time.
After this, this thesis will go over the financial crisis the world has been through the past couple of years, finding its reasons. It highlights the conjectural causes that started it, and also the structural reasons, that can be retrieved in the past crises this financial world has been through those past decades. It will explain how today's financial system is, by nature, unstable. The successive waves of deregulation that has blown over the liberal economies we are living in made it this way. This will lead us to analyze what are the actual problems in our financial and monetary system, and where some reforms need to be started in order to make our financial world more stable and more reliable.
Finally, it offers concrete direction to take in order to meliorate it. This starts with the idea of a Central bank, in every State and monetary union, which would be given (back) the monetary creation control. Today, commercial banks, which today control it, are responsible for the economic stability, without bearing this charge. This Central bank would have the economic stability as charge, and would be the only establishment allowed to create money. It would have the possibility to finance the State's investment at no interest rate. The banking industry would be split up in three independent entities that would be deposit, lending and investment, this in order to strengthen the banking system. In addition to that, stock markets have to be more regulated, passing intraday quotation to day to day, banishing trading softwares and forbidding banks to speculate for themselves. Those reforms would take time to implement and would face many interests, but at the end, they would benefit the collectivity.
