Bank and bank money: theory and regulation

Ten years after the crisis, a new analysis is needed on its causes, on the nature of the Bank and in particular of Bank money, which represents the core of Banking: the joint production of Credit and Bank money. The money produced by banks, i.e. sight deposits, has a crucial value in modern economies, being the basis of the payment system, the «safe asset» both necessary and irreplaceable. Bank money performs a function of fundamental public interest, and it is no coincidence that the States have always protected it from 1929 onwards, constantly intervening in many forms. In recent decades, however, the prevailing theories of Finance no longer put the production of Bank money in the center of the Bank model. In addition, since the end of the 1970s, the reform of Banking systems regulation and European Directives have favoured the model of the Universal bank, without solving the contradiction between the private nature of the Bank and the public interest for Bank money. Until the creation of the European Banking Union and the Brrd 2014 Crisis Management Directive, which set up the Bail-In mechanism, the internal rescue of a bank with private funds. But last years’ scenario and recent experiences in the resolution of banks, in which the presence of a national systemic risk has been recognized at the European level, confirm that the protection of Bank money has a public value, and that a new road must be sought