TPA.9 — A New Vision of Money — Banking & Finance
TPA.9 — A New Vision of Money — Banking & Finance
Money serves the economy.
TPA.9.1 — A Fundamental Change in Financial Architecture
The proposed system does not seek to make the existing financial system more complicated.
It seeks to simplify it fundamentally.
The citizen should have access to safe savings, liquidity and productive investment without having to navigate a large variety of financial products and intermediaries.
The basic principle is:
SIMPLE FINANCE — TRANSPARENT FINANCE — PRODUCTIVE FINANCE
TPA.9.2 — Two Distinct Functions of Banking
The banking system will be divided into two clearly defined functions.
Deposit Banks
Ordinary banks will primarily perform:
Deposit gathering
Custody of money
Payments
Transfers
Settlement
They will not undertake conventional productive lending across unrelated sectors.
Sector Financing Banks
Productive finance will be provided through sector-specific financing banks or institutions possessing genuine technical knowledge of the industries they finance.
TPA.9.3 — Productive Finance Based on Capability
The fundamental question for productive finance will not be:
“What property can the entrepreneur mortgage?”
It will be:
“Does this entrepreneur have the capability to create sustainable productive value?”
Financing decisions will therefore consider:
Professional capability
Demonstrated competence
Previous performance
Genuine demand
Technical viability
Industry benchmarks
The economics of the proposed activity
TPA.9.4 — No Collateral for Productive Financing
No collateral will be required for productive financing.
A professionally capable entrepreneur should not be prevented from establishing a viable enterprise simply because the entrepreneur or family does not own mortgageable property.
Capital should follow:
PROFESSIONALISM → CAPABILITY → VIABLE DESIGN → REAL DEMAND → CONTINUING PERFORMANCE
rather than existing ownership of wealth or property.
TPA.9.5 — Financing Decisions Supported by the National Information System
The financing institution will not have to depend solely upon the entrepreneur's declarations.
The proposed national information architecture can provide verified operating history.
Industry bodies can provide:
Sector knowledge
Technical standards
Industry benchmarks
Chartered and Cost Accountants can provide continuing financial integrity.
Sector financing institutions can therefore make technically informed financing decisions.
TPA.9.6 — A Simplified Financial System
The proposed system deliberately avoids creating a large range of financial instruments through which citizens' savings can become unnecessarily complicated or vulnerable.
There will be no mutual funds, bonds, life-insurance investment products or similar financial instruments in the proposed architecture.
The objective is not to create a larger financial-product industry.
It is to create a simple and transparent relationship between citizens, their savings and the productive economy.
TPA.9.7 — The Principal Financial Avenues for Citizens
The citizen's financial choices will therefore be concentrated around clearly defined avenues.
Designated Banks
For:
Safe custody of savings
Liquidity
Payments
Transfers
Everyday financial requirements
Direct Participation in Productive Enterprises
For direct participation in productive enterprises.
The citizen can therefore participate directly in the ownership and growth of productive companies rather than depending upon a financial intermediary to make the investment decision.
FlexiHomes Participation
Citizens can also participate directly in the FlexiHomes system.
Such participation is different from purely financial speculation because it can provide a direct economic benefit through housing and associated services, while also providing liquidity.
TPA.9.8 — Why Citizens Can Save Differently
The financial behaviour of citizens is closely connected with the wider architecture of the proposed society.
The individual receives:
HEALTHCARE THROUGHOUT LIFE
EDUCATION THROUGHOUT LIFE
CONTINUOUS EDUCATION AND SKILL UPGRADATION
GOVERNMENT FINANCIAL SUPPORT WHERE REQUIRED
and there is:
NO PERSONAL INCOME TAX
NO CORPORATE INCOME TAX
This changes the purpose of personal savings.
Savings need not primarily be accumulated as protection against:
Catastrophic medical expenses
Education expenses
Loss of earning capability because skills become obsolete
Personal income taxation
The citizen can therefore make a more rational choice about the use of accumulated savings.
TPA.9.9 — Savings Become Productive Capital
The citizen can retain savings safely in a designated bank or choose to participate directly in productive economic activity.
The basic flow becomes:
CITIZEN'S SAVINGS
↓
BANK DEPOSIT
OR
DIRECT PARTICIPATION IN PRODUCTIVE ENTERPRISE
OR
FLEXIHOMES PARTICIPATION
↓
PRODUCTIVE ECONOMIC ACTIVITY
The objective is to allow savings to become productive capital, rather than encouraging citizens to search continuously for increasingly complicated financial products.
TPA.9.10 — FlexiHomes as an Economic Participation Model
FlexiHomes participation has an additional feature that conventional financial investment does not necessarily provide.
It can combine:
PARTICIPATION IN THE ASSET / SYSTEM
ACCESS TO HOUSING SERVICES
REDUCTION IN LIVING EXPENDITURE
LIQUIDITY
Thus the citizen can obtain an economic benefit from participation while simultaneously reducing one of the largest recurring household expenditures.
TPA.9.11 — Direct Participation Instead of Financial Intermedia
The proposed system therefore seeks to minimise unnecessary financial intermediaries.
The citizen should be able to understand:
WHERE THE MONEY IS
WHAT IT IS DOING
WHAT PRODUCTIVE ACTIVITY IT SUPPORTS
WHAT BENEFIT THE CITIZEN RECEIVES
This creates a much simpler relationship between savings and the real economy.
TPA.9.12 — Financial Security Without Financial Complexity
The proposed social architecture changes the reason why people need financial products.
If healthcare is guaranteed, education is guaranteed throughout life, skill upgradation is supported and Government provides financial support where necessary, the citizen does not need to purchase a succession of financial products merely to protect against every possible life contingency.
SOCIAL SECURITY REDUCES THE NEED FOR FINANCIAL COMPLEXITY.
This is a fundamental feature of the proposed architecture.
TPA.9.13 — Protection Against Misuse of Savings
The elimination of unnecessary financial instruments also reduces the number of opportunities for financial products to be misunderstood, mis-sold or misused.
The proposed system favours:
SIMPLE PRODUCT → CLEAR PURPOSE → TRANSPARENT OWNERSHIP → DIRECT ECONOMIC RELATIONSHIP
rather than complex products whose underlying economic value may be difficult for an ordinary citizen to understand.
TPA.9.14 — Capital Follows Capability, Not Existing Wealth
This principle applies throughout the productive-finance system.
Today, possession of property can itself become an important qualification for obtaining further capital.
The proposed architecture reverses that logic.
EXISTING WEALTH SHOULD NOT BE THE PRIMARY PASSPORT TO PRODUCTIVE CAPITAL.
A capable entrepreneur with a sound project and genuine demand should have access to productive finance even without mortgageable property.
TPA.9.15 — Banking and Finance as Part of the Real Economy
The financial system is therefore not intended to operate as an economy separate from production.
Its function is to connect:
SAVINGS
↓
PRODUCTIVE CAPITAL
↓
PRODUCTION
↓
EMPLOYMENT
↓
GOODS & SERVICES
↓
ECONOMIC VALUE
The financial system supports the productive economy rather than becoming an independent arena for financial speculation.
TPA.9.16 — Transparency of Money Movement
The proposed national information architecture also establishes the principle that the legitimate movement of money should be transparently traceable.
The intended chain is:
PHYSICAL / ECONOMIC ACTIVITY
↓
COMMERCIAL TRANSACTION
↓
PAYMENT / SETTLEMENT
↓
ACCOUNTING RECORD
↓
COSTING / OPERATIONAL RECORD
This creates a connected economic record rather than requiring the economy to be reconstructed later from separate declarations.
TPA.9.17 — Advantages of the Proposed Banking & Finance System
For Citizens
Simpler financial choices
Safe custody of savings
Greater transparency
Direct participation in productive economic activity
Reduced dependence on complex financial products
Access to productive capital based on capability rather than inherited property
For Entrepreneurs
Productive finance based on capability
No collateral requirement
Sector-specific professional evaluation
Greater access to capital for capable individuals
Continuous performance-based financial relationship
For the Economy
Savings directed towards productive activity
Reduced financial speculation
Better connection between capital and real economic requirements
Improved access to finance for productive enterprises
Greater transparency of money movement
TPA.9.18 — The Fundamental Principle
Money is not the objective of the economy.
Money is an instrument of the economy.
The purpose of banking and finance is not to create financial activity for its own sake.
It is to enable:
CAPABILITY
↓
PRODUCTIVE CAPITAL
↓
ECONOMIC ACTIVITY
↓
EMPLOYMENT
↓
GOODS & SERVICES
↓
BETTER QUALITY OF LIFE
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