Comments (5)

• Marco Saba

  Safety Fears Over Nanobanking - CSM, 27 November 2008
  http://studimonetari.org/nanobanking.html

  A new report from the Italian Center for Monetary Studies (CSM) says all nanobanking projects should have an independent safety assessment. The precautionary principle should be applied to projests where there are potential risks but where it is not currently possible to assess their safety so that consumers are not put at risk, it says.

  Nanobanking

  Nanobanking is the science of manipulating money and credit reserves on the nanoscale -- 80,000 times smaller than the width of a human hair.

  The banking industry is using it to create new debts with novel properties through a fractional reserve system.

  On the flip-side, that might mean unexpected risks.

  CSM wrote to 67 banks and financial firms, including all of the main brands as well as smaller ones, asking them about their use of nanobanking, what benefits they thought it brought and how they ensured debt safety.

  Seventeen firms responded, and of these, eight were willing to provide information about how they used nanobanking.

  Most of the eight firms used nanobanking for the reserves in their cash accounts.

  CSM also found evidence of other banking companies offering nanoreserves online.

  CSM wants more safety checks and tighter regulation of their use.

  It says, at the moment, consumers cannot tell which accounts use nanoreserves as many fail to mention it.

  A researcher of CSM said: "We're not saying the use of nanoreserves in banking is a bad thing, far from it. Many of its applications could lead to exciting and revolutionary developments in a wide range of customers, but until all the necessary safety tests are carried out, the simple fact is we just don't know enough.

  "The government must introduce a compulsory reporting scheme for manufactured balance sheets so we are all aware -- and only those that are independently assessed as safe should be allowed to be used in banking."

  Regulation

  In September 2006, the government launched a voluntary reporting scheme for all engineered balance sheets with nanoreserves to find out what was, or could be, on the market, to guide the development of regulations. This has had a limited response -- 12 responses in two years -- and is now under review.

  A spokeswoman for the Italian Banking Association said: "The industry is working with government to provide more information on the safety of these nanoreserves.

  "The safety assessment of bank's accounts is a legal requirement and that assessment is robust and takes into consideration the particle size of money and credit."

  Professor Trickledown, chairman of the Royal Society working group on nanobanking, said: "The Royal Society has been calling, for the last four years, for companies to make public the safety testing methods they have been using on their nanoreserves. We are disappointed at continuing lack of transparency in this area.

  "More research does need to be done on the effects of manufactured balance sheets on human health and the environment. This is important so that regulation can be built on a proper understanding of any risks."

  A European Commission spokeswoman said: "We are working towards improving our ability to assess the safety of all bank accounts and sight deposits using nanoreserves including those at the ECB.

  "The Scientific Committee on Emerging and Newly Identifed Banking Risks (SCENIBR) is currently preparing an update of its 2006 opinion on the risk assessment of products of nanobanking. This update will be available in January 2009."

  The ECB Boiler Room said it did not consider its current use of nanoreserves was of concern to human health: its use helped to prop up the bankers' balance sheets.

  Published: November 26, 2008 10:10 PM

• Timothy foster

  I'm more interested if congress would support it or if he is overestimating his position?

  But it's probably just a ploy to ease the minds of business in hopes to counter the actual affect of his policy.

  Published: November 27, 2008 8:50 AM

• nalle

  LMAO, brilliant!

  Published: November 27, 2008 10:07 AM

• Ohhh Henry

  This "I'm going to cut government" hogwash can be consigned to the trash heap with the similar promises made by FDR and GWB, among others.

  "Office of the President Elect", pfffft.

  Soon the guy will be giving himself fancy medals and sewing ribbons and gold braid on his jacket to go along with the new titles he's giving himself.

  Remember the fairy tale "Seven at One Blow" ? The president-elect is the tailor, and the giants he will slay are US companies and jobs.

  Published: November 27, 2008 10:29 AM

• C

  Nanobanking! Excellent.

  Now that all my investments have shrunk to microscopic size, a nanobank is just the place for them!

  Published: November 27, 2008 3:17 PM