ZURICH (Reuters) – Swiss voters will learn on Sunday if their country will be the first in the world to introduce a radical new financial system that would prohibit commercial banks from creating money every time they make a loan.
The polls were due to close around 1100 GMT in the referendum National on the Sovereign Money Initiative, known as Vollgeld or "real money" in German, with an expected result around 1500 GMT.
The initiative, convened under the Swiss system of direct democracy after gathering more than 100,000 votes, wants to make the Swiss National Bank (SNB) the only authority in the country authorized to create money in the country.
The plan, if accepted, could have repercussions beyond the borders of Switzerland by eliminating a practice that underpins the majority of bank loans in the world.
Contrary to common belief, most money in the world is not produced by central banks, but is created by commercial lenders when they lend beyond the deposits they have for savers.
Supporters said their plan would make the Swiss financial system safer and that money in people's accounts would be safe from bank runs.
But opponents, including the SNB, the Swiss government and banks, have said the plan was a dangerous experiment that could harm the Swiss economy.
The latest polls showed that the initiative is unlikely to succeed, with 54 percent of respondents opposed to the plan and 34 percent in favor.
Reports by John Revill; Editing by Keith Weir