Traditional banks borrow money and fail when they can’t repay. The result, as the Great Recession showed, is potential economic devastation requiring massive taxpayer bailouts.
Banks borrowing money and failing to repay resulting in economic devestation requring taxpayer bailouts. With narrow banking, the money is safe as there is no gamling with peoples’s money.Narrow banks force Wall Street to pass on the interest to the househilds in the form of higher interest rates. It is strange that the Fed has opposed it due to regulatory reasons, because it would throw most if its regulators out of business.Both parties can force the fed via legislation to support moving to Limited Purpose Banking.
Sourced through Scoop.it from: thehill.com