Correction of unbalanced finance through the assumption of megabank bonds and the issuance of government currency
- Redesign of currency issuance rights based on the new global common rules (Post Plaza Agreement) -
Summary
■ Executive Summary
In order to correct the structural distortions in the current government bond-dependent fiscal and financial systems, this white paper
Propose a new currency supply model that integrates bond issuance by megabanks, government underwriting, and government currency issuance.
Traditional international cooperation has been centered on exchange rate adjustment (e.g. Plaza Agreement), but this proposal is the next step on that extension,
It presents a “post-plaza agreement” framework that internationally redesigns the monetary supply structure itself.
This model is
The government manages the total amount of currency supply
Banks are responsible for the allocation of funds
The stability of the system is guaranteed by global common rules
By doing,
It aims to simultaneously control the financial burden and restore the circulation of funds to the real economy.
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■ 1. Background and problem recognition
1.1 Limits of the current system
The current fiscal and financial structure is
Securing financial resources through the issuance of government bonds
Purchase by the central bank
Bank credit creation
Dependent on.
This structure is
Accumulation of debt
Interest payment burden
Pressure to increase taxes
Concentration of funds into the asset market
Cause, and as a result
Distortion is manifested in the form of an excessive burden on people’s lives.
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1.2 Limitations of international cooperation
The traditional international cooperation represented by the Plaza Agreement is
We have been trying to correct the imbalance through the adjustment of the exchange rate.
However,
The exchange rate is the result, not the cause
The structure of the fund flow will not change
It has the limit of.
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1.3 The essence of the problem
The essence is as follows:
The supply of money depends on debt
The allocation of funds is biased towards profitability
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■ 2. Proposal model
2.1 Basic structure
This model consists of the following processes:
Banks issue bonds
The government undertakes the bond in question
The government issues currency
Banks implement fund allocation
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2.2 Division of roles
● Government
Determination of the total amount of currency supply
Macroeconomic stabilization
● Bank group
Decision on the allocation of funds
Supply to the real economy
● Central bank
Payment function
Liquidity management
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2.3 The essence of the system
Separate the money supply from the debt and redesign it structurally
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■ 3. Global Common Rules (Post Plaza Agreement)
For the stable operation of this model,
It is essential to build a rule system that each country follows in common.
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3.1 Total volume control rules
Maximum issuance by GDP ratio
Inflation rate linkage adjustment
Suppression of oversupply
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3.2 Allocation rules
Set a minimum standard for the bank group:
Funding for the household budget
Loans for small and medium-sized enterprises
Real economic investment
Correction of financial bias
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3.3 Transparency rules
Disclosure of the issuance amount
Visualization of allocation
Securing credibility
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3.4 Cross-border management
Monitoring of capital movements
Exchange rate stabilization measures
Prevention of institutional avoidance
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3.5 International operating entity
The following international organizations are the basis for institutional operation:
International Monetary Fund
Bank for International Settlements
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■ 4. Expected effect
4.1 Improvement of financial structure
Reduction of dependence on government bonds
Suppression of future burden
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4.2 Recovery of the real economy
Funding for the household budget
Revitalization of production activities
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4.3 Correction of imbalance
Relaxation of asset market bias
Narrowing the gap
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■ 5. Risk and response
5.1 Distortion of distribution
→ Controlled by allocation rules
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5.2 Inflation risk
→ Control with total amount management
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5.3 Substantial government burden
→ Issuance ceiling and monitoring
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5.4 Difficulties in international cooperation
→ Step-by-step introduction
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■ 6. Introduction process
Trials in a single country
Cooperation in multiple countries
International standardization
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■ 7. Conclusion
This proposal goes beyond the traditional international cooperation (Plaza Agreement) centered on exchange rate adjustment,
It aims to build a new international financial order that redesigns the monetary supply structure itself.
The important thing is,
Separating total volume management (government) and distribution function (bank)
To ensure the stability of the system by universal rules
It is.
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■ Final definition
This model is a redesign of the right to issue currency under the “Post Plaza Agreement”.
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