FT.com / Martin Wolf – Why narrow banking alone is not the finance solution

FT columnist Martin Wolf considers narrow banking and 100% reserves.

The FT has a new series on the future of investment. But what, I wonder, is the future of finance itself? Who is confident that the financial system now emerging from the crisis is safer, or better at servicing the public’s needs, than the one that went into it? The answer has to be: few people. The question is how to remedy this dire situation.

What entered the crisis was, we now know, an ill-managed, irresponsible, highly concentrated and undercapitalised financial sector, riddled with conflicts of interest and benefiting from implicit state guarantees. What is emerging is a slightly better capitalised financial sector, but one even more concentrated and benefiting from explicit state guarantees. This is not progress: it has to mean still more and bigger crises in the years ahead.

via FT.com / Columnists / Martin Wolf – Why narrow banking alone is not the finance solution.

Written By
More from Steve Baker
Baxendale and Evans make the SSRN top ten
On 26 August 2009, Baxendale and Evans’ paper Assessing UK Money Supply Measures...
Read More
0 replies on “FT.com / Martin Wolf – Why narrow banking alone is not the finance solution”