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If a narrow bank makes money and pays taxes on the money it makes, then how would that be free loading? Also, are you implying the current banking system does
by ta1234567890 8y ago
If a narrow bank makes money and pays taxes on the money it makes, then how would that be free loading?
Also, are you implying the current banking system does not free load from the government?
- pas 8y agoIt would be free loading in the risk sense. They wouldn't participate in the money creation, wouldn't help the economy assess credit risk, etc. Though I don't see how that would be a problem. If someone wants more yield they have to take on more risk. This bank would essentially become a big vault. If the central bank pays interest then they pay interest, if it doesn't they have to charge for holding the deposit. And there will be always people willing to take out a loan, and they would be able to at other banks.