The Currency School vs the Banking School: A New Integrationist Paradigm

37 Pages Posted: 23 Jan 2023

See all articles by Plamen Ivanov

Plamen Ivanov

University of Winchester

Richard Werner

University of Winchester


Currency School proponents insist on depriving commercial banks of the ability to create near money. The money seigniorage function should be delegated to independent, technocratic central bankers. The Banking School argue that such a centralization of the institutional order will harm the economy. This paper shows that the modern repetition of this academic debate is a re-iteration of the historical arguments without new contributions to the development of economic thought. Instead, an integrated view is conceptualized, which draws its empirical foundations from the successful German economy and its highly decentralized community bank system. The advanced progressive institutional order paves the way for a just distribution of abnormal banking profits for the benefit of the wider public and avoidance of the recurring banking crises as theorized by both schools of thought.

Keywords: Currency School, Banking School, integrationist framework, endogenous money, community banks

Suggested Citation

Ivanov, Plamen and Werner, Richard, The Currency School vs the Banking School: A New Integrationist Paradigm. Available at SSRN: or

Plamen Ivanov (Contact Author)

University of Winchester ( email )

West Hill
Winchester, SO22 4NR
United Kingdom

Richard Werner

University of Winchester ( email )

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