By Chris Dorrell Reform UK announced plans to squeeze a bit of extra money out of the banking system on Monday through a major overhaul of monetary policy. Reform’s suggestion is that the Bank of England could stop paying interest on the remaining £700bn of commercial bank deposits created through quantitative easing. By paying Bank Rate on those reserves, the Bank of England – and ultimately the Treasury – is having to transfer money over to the commercial banks. Cutting interest payments on those deposits is not a hugely radical suggestion. Two former Bank of England governors and a former P…