IDEAS home Printed from https://ideas.repec.org/p/lev/levppb/ppb_17.html
   My bibliography  Save this paper

Narrow Banking Reconsidered, The Functional Approach to Financial Reform

Author

Listed:
  • Ronnie J. Phillips

Abstract

Phillips presents the functional approach to reforming the financial system.This approach advocates the structural separation of the depository and lending functions of banks. As a result of such a separation, monetary and credit policy undergo a parallel separation, and government supervision and regulation of the banking industry are modified. The policy prescription developed within this approach is narrow banking, the creation of separate monetary and financial service companies with the elimination of or a substantial reduction in deposit insurance. Narrow banking not only meets the safety and soundness goals of bank regulation, but also maintains an institutional structure that accommodates market forces and technological innovation. He recommends the creation of monetary service companies that would serve strictly a payments function and would hold only safe assets and the establishment by the federal government of a mutual fund that holds only government securities as assets.

Suggested Citation

  • Ronnie J. Phillips, "undated". "Narrow Banking Reconsidered, The Functional Approach to Financial Reform," Economics Public Policy Brief Archive ppb_17, Levy Economics Institute.
    • Handle: RePEc:lev:levppb:ppb_17
    as

    Download full text from publisher

    File URL: http://www.levyinstitute.org/pubs/ppb17.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Mark D. Flood, 1992. "The great deposit insurance debate," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 51-77.
    2. Hyman P. Minsky & Dimitri B. Papadimitriou & Ronnie J. Phillips & L. Randall Wray, 1992. "Community Development Banks," Economics Working Paper Archive wp_83, Levy Economics Institute.
    3. Hyman Minsky, 1994. "Financial instability and the decline(?) of banking: public policy implications," Proceedings 20, Federal Reserve Bank of Chicago.
    4. Dimitri B. Papadimitriou & Ronnie J. Phillips & L. Randall Wray, 1993. "The Community Reinvestment Act, Lending Discrimination, and the Role of Community Development Banks," Economics Working Paper Archive wp_95, Levy Economics Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jan Kregel, 2014. "Minsky and dynamic macroprudential regulation," PSL Quarterly Review, Economia civile, vol. 67(269), pages 217-238.
    2. Biagio Bossone, "undated". "Should Banks Be "Narrowed"? An Evaluation of a Plan to Reduce Financial Instability," Economics Public Policy Brief Archive ppb_69, Levy Economics Institute.
    3. L. Randall Wray, 2006. "Can Basel II Enhance Financial Stability?: A Pessimistic View," Economics Public Policy Brief Archive ppb_84, Levy Economics Institute.
    4. Jan Kregel, 2012. "Minsky and the Narrow Banking Proposal: No Solution for Financial Reform," Economics Public Policy Brief Archive ppb_125, Levy Economics Institute.
    5. Scott Burns, 2016. "Old (Chicago) school, new century: the link between Knight and Simons’ Chicago plan to Buchanan’s constitutional money," Constitutional Political Economy, Springer, vol. 27(3), pages 299-318, September.
    6. Ronnie J. Phillips & Alessandro Roselli, 2009. "How to Avoid the Next Taxpayer Bailout of the Financial System: The Narrow Banking Proposal," NFI Policy Briefs 2009-PB-05, Indiana State University, Scott College of Business, Networks Financial Institute.
    7. Hassan Bougrine & Mario Seccareccia, 2013. "Rethinking banking institutions in contemporary economies: are there alternatives to the status quo?," Chapters,in: Monetary Economies of Production, chapter 10, pages 134-159 Edward Elgar Publishing.

    More about this item

    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:lev:levppb:ppb_17. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Dunn). General contact details of provider: http://www.levyinstitute.org .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.