Narrow banks could lead to a narrow future.

Sir Prof Sol Picciotto on “How to create narrow banks with purpose” July 3, suggests requiring from “any bank that benefits from state support to engage only in classes of transactions that have received regulatory clearance”. Sound great but what kind of transactions of those who got the banks into problems did not have regulatory clearance and of these which would not have received regulatory clearance? Those with AAA ratings?

We continue trapped in the belief that there was some sort of excessive risk taking that got us into this crisis while in fact what happened was that the financial world was authorized to engage into an excessive risk-aversion and that turned out so bad when the officially appointed risk-surveyors failed.

We continue trapped in the belief that there was some sort of excessive risk taking that got us into this crisis while in fact what happened was that the financial world was authorized to engage into an excessive risk-aversion that turned out bad when the risk-surveyors failed.

If we want a better world then let the banks be banks but if all we want is to desperately conserve then I guess we have to go for “narrow banks”.