On February 20, the Spanish edition of the book “Farewell to Banks” [1] by the former governor of the Bank of Spain Miguel Ordoñez will be in bookstores. The book contains a set of reflections on the advantages of using as money what we now call Central Bank Digital Cash (CBDC, i.e. deposits in the Central Banks) instead of using fragile deposits in private banks. An English translation of the book index can be found at the bottom of this post. 
 
[1] In Spanish: “Adios a los Bancos. Una visión distinta del dinero y la banca”
 
Miguel Ordoñez writes about his book:
 
“I discovered these ideas after leaving my position as governor of the Bank of Spain, when preparing seminars that I have been teaching these years in a Madrid University. At that time this vision was defended exclusively by a very small group of researchers and activists. Among them was Positive Money whose documents were very valuable to prepare this book and therefore I want to take this opportunity to convey my admiration and thanks for your work.
 
Last summer, when I delivered the manuscript to the editor, nobody could still foresee the CBDC media revolution that was going to unfold throughout the world. But Facebook’s announcement to create Libra, a private digital currency, has forced most Central Banks to study, experiment and even approve the issuance of public digital money (CBDC) in its various modalities. As D. Marcus has said, “we don’t know how it will end, but I’m sure the system will be different from what it is now.” The extraordinary atmosphere of expectation that has been created on the possibilities of public money and the reform of Money and Banking is very positive.
 
There may be many readers who do not share the ideas and proposals for money reform that I present in this book. In fact, the longest chapter in the book is titled “Doubts and Criticisms.” Even so, even when I also doubted, I always felt that it was worth knowing them because their vision, different from the usual one, helps to better understand the problems that commercial banks, their regulators and central banks have today.
 
“Farewell to Banks” is an outreach book, written in a very simple language so that anyone can understand the current problems of the monetary and banking system and the benefits of using public and secure money. The debate between experts is essential, but, in democracies, nonexperts, voters, also have the right to know what is being said.
 
Best regards,
 
Miguel Fernández Ordoñez
 
PS: I have attached an English translation of the book index and an image of the book cover.
 
FAREWELL TO BANKS

A Different View of Money and Banking

Content

INDEX

INTRODUCTION

Chapter 1 – THE PROBLEMS OF BANK MONEY

The damages of the banking crises.

What banks do

Fragile money and Safe money

The two meanings of the invariability of value.

Banks and the financial system

The creation of money.

The most protected and intervened sector.

Inventory of privileges and protections

The prudential regulation. An almost “soviet” interventionism Supervisors and central banks.

Police and angels.

Diagnosis: Too much Market or too much State?

Chapter 2 – CHARACTERISTICS OF THE SAFE DIGITAL MONEY REFORM AND BANKING LIBERALIZATION

Safe Money is the essential element of the reform.

Characteristics of a Safe Money system

The functions of the Issuing Entity or Central Bank

The interest rate of money

Destination of money created by the Issuing Entity.

The separation of money from the financial system

The liberalization of the lending market and payment services.

Brief history of the idea of Safe Public Money

The regulation of the new system

Chapter 3 – BENEFITS OF SAFE DIGITAL MONEY

The end bank crises.

Breaking the money-debt marriage

A more efficient monetary policy

Distributive effects of monetary policies

Citizens get the benefits of creating money.

The separation of money from politics.

Economic power is distributed.

The benefits for the Euro and the European Union.

The benefits of the current system are maintained.

Chapter 4 – BENEFITS OF BANKING LIBERALIZATION

Why has the banking system not yet been liberalized?

The structural reform of the banking sector

More competition and more innovation.

Less subsidies

Social objectives with better instruments

Less opacity

More diversity, less concentration

The market regulates better than regulators

Chapter 5 – DOUBTS AND CRITICISMS

Assessment, criticism and propaganda.

Will there be enough credit and investment?

Who will make the maturity transformation? Will monetary policy be difficult?

Does the reform imply greater nationalization?

Will the reform increase the instability of the banks?

Deception and fraud.

The protection of investors and users

Basel III is enough to avoid crises

Safe money will not end financial crises

The market will invent CBDC substitutes and we will not have solved anything.

Will the banks disappear with the reform?

Other radical reforms

A reform for all ideologies

Hayek’s advice to respect spontaneous orders.

The CBDC and the Rule of Law The design of the CBDC.

The “details” matter.

The CBDC is not a panacea

The importance of the transition.

Chapter 6 – THE FUTURE OF MONEY AND BANKING

The difficulties of a simple reform.

A reform in its infancy.

Reform or transformation?

What should and what will happen.

New technologies, money and banking

Praise the small reforms.

A reflection on Libra, the currency of Facebook

Learning from the past: other economic and political reforms

The future upside down.

Would we go back? (A fiction)

ANNEXES

Annex 1. To understand Supervisors and Central Bankers.

Annex 2. The names of the money and its reform.

GLOSSARY

ACKNOWLEDGMENTS

REFERENCES AND BIBLIOGRAPHY

 
 
 
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Claudio D'Eugenio
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Claudio D'Eugenio

The link to “An English translation of the book index can be found here” doesn’t work.

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Govert Schuller
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The index is now at the end of the post.

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Howard Switzer
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Howard Switzer

Will the book be available in English?

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