Why Western Banks Are Being Destabilized

In a previous post, I explained that banks are inherently fragile. One way to make them more robust is to increase equity capital requirements … A genuinely radical approach would be to kill banking as we know it. Rip all banks, large or small, in two – separate deposit-taking from credit-creation. Back the deposits one-for-one with reserves at the central bank. Then fund loans not with deposits or other money-like liabilities but by tapping investors who understand they’ve put their savings …

via The Cuckoo’s Nest http://thecuckoosnest.forumotion.com/t1552-why-western-banks-are-being-destabilized

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