The centerpiece of the WFC proposal is the innovative use of a financing tool that utilises the ability of the IMF to create new money in the shape of its own reserve currency: Special Drawing Rights (SDRs). Such new funding will not be inflationary if issued only against performance, i.e. to produce new goods and services with (mostly) unused productive capacities and unemployed labour. The use and control of this new money could be coordinated by the Global Environment Facility, UNEP, UNDP or the new Green Climate Fund of the UNFCCC.
Not all investment banking is chaff; it is – apart from excessive trading and innovations such as the never-ending expansion of derivatives – a meaningful part of real economy finance as well. At the same time, there is chaff in retail banking, about which many retail clients can tell us. This means that we have to sort out the chaff, in order to come to a workable and effective financial system.