IDEAS home Printed from https://ideas.repec.org/a/pal/jbkreg/v26y2025i2d10.1057_s41261-024-00260-z.html
   My bibliography  Save this article

The case for a less deposit-intensive banking model

Author

Listed:
  • Joseph Bitar

    (American University in Dubai - School of Business)

Abstract

The current banking model is distorted by government subsidy to banks financing risk, in the form of explicit deposits guarantees and implicit bailout guarantees. Starting from the financing model of bank intermediation, we argue for a self-sufficient banking architecture based on the securitization model. We propose the “15/30–20/40” rule relying on a double equity and non-deposit debt/bonds cushion, making client deposits a safe asset that is able to perform its monetary functions without the need for government guarantees. Finally, we show how CBDC can contribute to the stability of the monetary and financial system.

Suggested Citation

  • Joseph Bitar, 2025. "The case for a less deposit-intensive banking model," Journal of Banking Regulation, Palgrave Macmillan, vol. 26(2), pages 279-287, June.
    • Handle: RePEc:pal:jbkreg:v:26:y:2025:i:2:d:10.1057_s41261-024-00260-z
    DOI: 10.1057/s41261-024-00260-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41261-024-00260-z
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41261-024-00260-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Financial regulation; Bank capital requirements; CBDC;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jbkreg:v:26:y:2025:i:2:d:10.1057_s41261-024-00260-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.