One way to make banks safer? Make them "narrower."
Limiting riskier, illiquid investment could make banks and the financial system more stable — but the Federal Reserve isn’t so sure.
Source: marketplace.org
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Place a growth limit on the Fed's reverse-repo facility
While the central bank's reverse-repurchase facility generally works to stabilize the financial system, under certain circumstances it would spark a rapid flow of deposits out of banks. A growth cap would prevent that problem.
Source: americanbanker.com
When the US Fed rebuffed a bank for being 'too safe'
The Narrow Bank upended the traditional banking model by proposing to park depositors’ funds solely in risk-free reserves at the Fed. The regulator was not impressed.
Source: moneycontrol.com
Federal Reserve Independence: Foundations And Responsibilities, Vice Chair Richard H. Clarida, At The Federal Reserve Bank Of Cleveland, Cleveland, Ohio (Via Livestream)
<p><span>The COVID-19 pandemic and the mitigation efforts put in place to contain it delivered the most severe blow to the U.S. and global economies since the Great Depression.</span><a title="footnote 1" href="https://www.federalreserve.gov/newsevents/speech/clarida20211130a.htm#fn1"><span>1</span></a><a name="f1"></a><span> Gross domestic product (GDP) collapsed at a nearly 33 percent annual rate in the second quarter of 2020. More than 22 million jobs were lost in just the first two months of ...
Source: mondovisione.com