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Gotta ask whether the banking system makes sense in its current form. - Part of it is actually a utility. Payments, sending money from one place to another, ma

• theplague42 7y ago
  There have been suggestions over the years for the post office to offer banking services. They have branches literally everywhere, they're independent yet still a government agency, and have no profit motive.
  • alexpetralia 7y ago
    I could not imagine the amount of financial, operational, technological and regulatory infrastructure that would need to be ported over, however.
    • toomuchtodo 7y ago
      We have the US Digital Service [1] and 18F [2]. We (US citizens) should demand Congress to provide them the authority to deliver the modernization required to implement such infrastructure. Use Login.gov [3] to provide for digital identity management of these accounts. Perform in person KYC using USPS and DHS/CBP branches, and identity proofing online using traditional service providers (IRS already does this for your IRS account, SSA might, I haven't checked recently). The path to success is straightforward. EDIT: So I did some digging, and it appears that the US Treasury has partnered with Comerica Bank in Texas to provide this sort of service to Social Security benefit recipients [4] (because the Treasury requires electronic payment of social security benefits, and you can't leave seniors unbanked). The challenge is going to be to find Congressional reps supportive of bringing this functionality in house, which isn't unreasonable IMHO, to provide this as a utility to all US citizens. I have already fired off a FOIA request to get details on the contract between Treasury and Comerica. [1] https://www.usds.gov/ https://www.usds.gov/ | [2] https://18f.gsa.gov/ https://18f.gsa.gov/ | [3] https://login.gov/ https://login.gov/ [4] https://www.usdirectexpress.com/ https://www.usdirectexpress.com/
      • basch 7y ago
        Would it be feasable for the government to acquire a mobile first bank and graft it onto the post office? Either chime, bankmobile, moven, or simple. Is it a space the government wants to compete against Apple and Google? If every mobile phone in the country comes with a free integrated banking service, how do you compete? Would the government better serve by using its resources to regulate interoperability and compatibility, and rule following, than by competing? I totally get why a free post office bank would do great things to serve the underbanked. But if the government is going to get into banking, id like to see it go a step further, more like Singapore, and be some kind of new HSA type account offering, a forced savings account that can be used to pay rent and more.
        • monocasa 7y ago
          It's not politically feasible. The Republicans have been trying to kill off the USPS for decades now, and would torpedo any effort to expand it's scope in a way that that the USPS might be competent at.
          • toomuchtodo 7y ago
            Right, you need more reps who support protecting and expanding public goods like the USPS, regardless of political affiliation.
    • Etheryte 7y ago
      I think the problem really isn't as complicated as that list might make it seem. In my home country (EU), local shops offer basic banking services (withdraw, deposit money) in rural areas where banks have no incentive to have a branch. They're already integrated into the wider cash flow system, money is moved to and from the locations securely regularly, etc. Postal offices would tick all those boxes as well with the additional contextual benefit of being government-run.
    • Spooky23 7y ago
      It's not that hard. Just assume control of some bankrupt bank or even contract out the backend, and put terminals in post offices. When Bank of America merged with a few others, they actually operated several of the old banks at once for awhile. Medicare uses the latter model for claims processing -- big insurance companies bid on processing, subrogation, etc.
    • specialist 7y ago
      Not commercial banks. Above examples are just passbook (personal) savings and misc services. Super simple. Though I'd be open minded towards some overlap with credit unions.
    • grecy 7y ago
      There are plenty of comments in this very thread that give examples of many other countries already doing it, including countries that have way lower GDP/Person than the US. Are you saying the US is incapable of doing what is already being done in many other countries?
      • thephyber 7y ago
        > Are you saying the US is incapable of doing what is already being done in many other countries? "Incapable" assumes lots of things, but practically speaking the number of things that we (the USA) "are capable of doing" is shrinking and using GDP/Person is an interesting way to illustrate the point. We are overpaying for services that other countries have managed to solve for reasonable costs. University tuition, healthcare, building infrastructure are all ridiculously expensive in the USA, so our higher GDP/Person is largely wasted compared to most other OECD countries. Our government and the crooked ethical guidelines of our companies/organizations are why this overpricing started and continues to exist. For those tasks which require regulatory/legal changes, the USA is swimming in peanut butter. What we "are capable of doing" largely has to do with our Legislature+Executive branches ability to find ways to make productive changes (rare) without sabotaging those same efforts (even rarer). But half of those people are rowing in one direction (team red) and the other half in another (team blue). The USA's primary policy tool is "make the most visible spectacle of brinksmanship" and has been for 10+ years. The people/companies in the USA are capable of feature parity with just about any other country's people/companies, but that assumes that our government either doesn't get in the way or their government doesn't assist them.
  • user5994461 7y ago
    Are you talking about the US post office? The post office in France already offer banking. It's mandated by law as a public service and they can't reject customers. It doesn't offer the more complex products or investments though, it ain't their purpose. Not sure about the UK post office. Seem to offer a lot of banking services and cards, but it says it doesn't do current accounts anymore.
    • jonny_eh 7y ago
      Yes, the article was about the US.
    • dboreham 7y ago
      The UK Post Office did offer banking. Not sure if it survived Thatcher..
      • Milner08 7y ago
        They offer some things now (deposits, travel cards, etc), but I am not sure they offer actual accounts anymore.
        • jermaustin1 7y ago
          According to their website, they still offer almost everything a traditional bank does. Including personal loans, and mortgages [1]. 1: https://www.postoffice.co.uk/money https://www.postoffice.co.uk/money
          • makomk 7y ago
            A lot of that is just rebranding of services offered by one of the normal, traditional banks though.
    • notJim 7y ago
      > they can't reject customers This would be a huge thing in the US, where poor people cannot get bank accounts, and end up needing to use predatory paycheck cashing providers who take huge fees instead.
  • Bombthecat 7y ago
    Germany did that (post bank) didn't want so well...
    • pstrateman 7y ago
      What went wrong?
      • joering2 7y ago
        Something must have gone wrong. I know for fact that in Poland you can bank at post office at least since 90s. Its still common think for seniors to have no bank account because there is no need to. They typically get pension in form of a government check that they cash at "Poczta Polska" and then use cash to shop. Post office also pays all the bills, utilities etc, so long as you know corporation/receipient bank number.
      • allendoerfer 7y ago
        Nothing. It got privatized and is currently owned by Deutsche Bank.
        • Talanes 7y ago
          It's not nothing if it was privatized. Either something went wrong to drive privatization, or nothing was going wrong to begin with and then privatization was what went wrong.
          • allendoerfer 7y ago
            Postbank got privatized, because in the 90s everything got privatized. It is used today by Deutsche Bank to target its private customers. It is not one of the fintechs but generally able to compete in that market.
    • yardie 7y ago
      Post Bank formed from Deutsche Bank. Which was made infamous for loaning Donald Trump loads of money on highly questionable terms.
  • slezyr 7y ago
    In Ukraine we used mail mans to deliver pensions, that was horrible for them. Almost every year they were assaults in which they died. They represent a simple target as they don't have means to protect themselves.
    • sova 7y ago
      Cash delivery?
      • slezyr 7y ago
        Yes, direct to the person at the post office and between the cities.
  • Betelgeuse90 7y ago
    There's a postal service bank in Israel as well. Lots of people use it, it's a fine service. They also offer fantastic foreign exchange rates, pretty much the best I think.
  • anonAndOn 7y ago
    I believe Japan Post offers(ed?) this service. They had the best FX exchange rates, as well.
  • igravious 7y ago
    We have this in Ireland! https://www.anpost.com/Money https://www.anpost.com/Money
  • thephyber 7y ago
    The USPS used to run limited banking services[1] in the 20th century. It was largely obsolete by the 1960s (according to the Wiki article). It's also important to note that the USPS is required to be self-sufficient in its purse strings, but is heavily restricted in what markets it can/can't be in by Congress. I think the "privatize everything" crowd of legislators/lobbyists see the USPS in banking as an existential threat to private banks profit margins and it won't happen without a political black swan (maybe not even in the current black swan environment). [1] https://en.wikipedia.org/wiki/United_States_Postal_Savings_System https://en.wikipedia.org/wiki/United_States_Postal_Savings_S...
  • bostonvaulter2 7y ago
    This was one of Andrew Yang's policy proposals in his presidential bid (and it was one of my favorites). Looks like a bunch of other countries already do it as well.
• deleted 7y ago
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• pm_me_ur_fullzz 7y ago
  > What if we had the central bank give everyone an account that was interoperable with the rest of the banking system? Because we don't trust the central bank enough (edit: to not arbitrarily give their friends money directly - still happens though). And they don't want to be politicized by giving up autonomy. So the current compromise is that by law they can't lend directly except by Congressional statute, such as the CARES Act stipulates.
  • deleted 7y ago
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  • pjc50 7y ago
    > Because we don't trust the central bank enough What does this actually mean? "Trust" isn't a one-dimensional version. What don't you trust them to do or not do? Do people really "trust" Wells Fargo, opener of fraudulent accounts, more than the Federal Reserve? Why?
    • pm_me_ur_fullzz 7y ago
      To not arbitrarily give certain citizens money. At least now they have to make a private placement offer and jump through a few hoops to get the right bond rating
      • pjc50 7y ago
        That's the great paranoia about the Federal Reserve? Seems .. anticlimactic. Besides, the agency responsible for shipping huge amounts of cash to random people in total secrecy is the DOD. All those pallets of dollars that went missing in Iraq.
• baddox 7y ago
  Consider that the Information Age has made actual financial work vastly less expensive (computers, spreadsheets, digital communication, etc.) while at the same time the finance sector has grown to be a much higher portion of the economy (in GDP). There could be a plausible explanation, but it certainly seems fishy.
  • chrisco255 7y ago
    Do you know how many more financial abstractions exist today than 40 years ago? That being said, I fully support moving 90+% of financial activity to smart contracts.
• drawkbox 7y ago
  Policy should have sent the money directly to companies from the SBA/IRS, customers then would choose the banks to service that guaranteed government grant/loan essentially. Much like the FAFSA system for student loans, you get your amount, then a servicer handles the actual loan but there is literally no risk to them as it is guaranteed. Why we sent guaranteed money to be held up in banks and did information and credit checks, on already known information from the IRS, well we know why, to pilfer it. Had they ran it a better way, using the actual market, directly to businesses/individuals, that is lots of money out there for banks to go get and the market knows it is out there as well. Markets like knowing hundreds of billions and trillions are out there to go get. Make them earn the fees if they must. Instead, it was a direct transfer from the Fed and treasury to QE that was pilfered by the usual suspects: hedge funds, market makers, foreign funds, oligarchs, wealth/value extraction ops, naked short selling, short and distort and more. The SBA money was pilfered by banks and large companies. The 'stimulus' for the economy, routed around the entire actual economy, never reaching individuals or true small business.
  • _curious_ 7y ago
    "The 'stimulus' for the economy, routed around the entire actual economy, never reaching individuals or true small business." How can this be true if innumerable number of individuals received $1200 checks and many small businesses also received varying amounts in the four and five digits?
    • Lich 7y ago
      There are still millions of eligible people who cannot use the get my payment tool to get their status on the stimulus payment. Companies like Ruths Chris Steakhouse who spent millions in stock buybacks and have millions in reserve are receiving millions when they don’t need it. Shake Shack got 10 mill. and even though they returned it due to public backlash, now it can’t be loaned out again until the next PPP-like loan funding is approved. PPP is depleted giving out to large, publicly traded companies...not small businesses.
• pjc50 7y ago
  Socialism! More seriously, compare the UK's former state-run consumer bank: https://en.wikipedia.org/wiki/Girobank https://en.wikipedia.org/wiki/Girobank > The organisation chalked up notable firsts. It was the first bank designed with computerised operations in mind; the first bank in Europe to adopt OCR (optical character recognition) technology; the first bank to offer interest-bearing current accounts, and the first bank in Europe to offer telephone banking, operating several years prior to the start of Midland Bank's First Direct service. It is widely credited for shaking up the UK banking market, forcing competitors to innovate and respond to the needs of the mass market. It was literally by the socialist government to give cheap and effective banking to the unbanked working class in the 1960s. Another issue for the US: the EU has an explicit remit for a single market. The US does not, and in some areas it's much less harmonised. Banking is one of them. The US would benefit from a central organisation coordinating things like Faster Payments. Everybody should have the opportunity to do fast, secure, free interbank payments.
• tyre 7y ago
  You’re describing “narrow” banks. While they make sense for consumers, our banking system is tightly coupled with another: mortgages. The money that you deposit is loaned out. Could the federal government do the too? Sure, and the government (talking about the US here) does end up owning a large chunk of mortgages via Fannie Mae and Freddie Mac. But the expertise and the manpower around vetting the mortgages is a _lot_ of work. Work that the federal government couldn’t decide to take on tomorrow, might not even want to, and if they announced that they were going to try would shake the core of the stock markets. (And yes, stock markets matter for more than just making rich people richer.) On the other hand you suggest de-coupling: “Find a lender.” If you take away the deposits, who has that much money to lend out without being dangerously leveraged? If you were to design an economic system, this might be the one you’d design. Given the one we have, narrow banks are difficult to allow without some significant “turbulence”.
  • toomuchtodo 7y ago
    It is rare today that banks hold mortgages and use depositor funds to fund them. Most (government backed, such as FHA, Fannie, and Freddie) mortgages are securitized and sold on the secondary market to bondholders (there are caveats for small banks, credit unions, and non-qm lenders). A narrow bank does not require lending to service deposit accounts. It doesn't even need to pay interest to account holders. It simply needs to accept, store, and distribute fiat on the behalf of its customers via ACH, debit, and credit processing networks. Think prepaid card with no fees and no overdraft capability. The Federal Reserve is culpable in that it will not approve banking licenses for narrow banks [1], as it challenges the business model of existing entrenched banking organizations. Can you build a narrow bank without getting the Fed to sign off? That is a conversation I would be interested in having over a cup of coffee. [1] https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/49204495 https://www.spglobal.com/marketintelligence/en/news-insights...
    • SilasX 7y ago
      Really? You mean, even an existing (approved) bank can't just one day decide to stop lending and revert to narrow functions?
• MR4D 7y ago
  People always seem to miss this key point: The central bank is not a regular bank, it’s a “reserve” bank. Very different function.
  • MiroF 7y ago
    My understanding was that GP was suggesting a change in the function of the central bank. Did you have a different interpretation?
    • MR4D 7y ago
      I missed that interpretation, but upon rereading the post, it sounds like you are correct. That being said, the central bank (at least in the US) is structured much more like a think tank and policy center than anything close to a customer-facing organization. Personally, I'm not a fan of that idea, but I completely agree that banking policies/regulations need to be overhauled.
      • MiroF 7y ago
        > structured much more like a think tank and policy center Uh, I agree that the central bank isn't consumer facing - but this is a bit of a stretch. Think tanks don't loan trillions of dollars.
        • MR4D 7y ago
          Not much of a stretch, though. From [0]: The Federal Reserve 1 conducts the nation's monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy; 2 promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad; 3 promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole; 4 fosters payment and settlement system safety and efficiency through services to the banking industry and the U.S. government that facilitate U.S.-dollar transactions and payments; and 5 promotes consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations. Other than #4 (which as you say is clearly is nothing like a think tank), all the rest have significant policy or regulatory actions. [0] - https://www.federalreserve.gov/aboutthefed/structure-federal-reserve-system.htm https://www.federalreserve.gov/aboutthefed/structure-federal...
• dependenttypes 7y ago
  Right now as things are Banks are just leeches offering minimal value to the world yet receiving a lot of income.
  • danesparza 7y ago
    This is a very one-sided and unsupported (I don't see links to articles) argument. You can do better.
  • imtringued 7y ago
    I'm pretty sure banks are offering lots of value. What would you do without an electronic bank account? Send cash via mail? The problem is that they are abusing their monopoly position and lack accountability which results in a moral hazard. You didn't mention any of that.
• burrows 7y ago
  > Part of it is regulatory. We don't want money laundering. Have to ask whether this really ought to be up to law enforcement to do, or as it is now a massive burden on the banks, which also have bad incentives. End drug prohibition.
• rapind 7y ago
  Instead of all the fuckery, imagine if the government just sent everyone a monthly cheque with the only criteria that they are a living breathing adult with a US address. Universal trickle up.
  • _curious_ 7y ago
    Imagine if you lived with an attitude like this...entitled to something just for being born. Genuinely curious: where does this come from?
    • MiroF 7y ago
      Most theories of the good hold that you are certainly entitled to things just for being born - take your life for instance. Your alternative conception is far outside the norm.
      • i_am_nomad 7y ago
        Fundamentally, your retort to the parent’s (poorly expressed and now dead) reply is sound, though I believe they might have been circling the concept of negative vs. positive rights. It’s an interesting topic and one worthy of debate, though sadly that debate has become fraught with emotion and passion, to the point that it’s on a level with abortion - it just can’t be discussed in most circles.
        • MiroF 7y ago
          Maybe, although I believe that it's not too hard to have a basic argument about negative v. positive rights. Some people debate and feel passionately about the things they believe. As long as they're making arguments, I am not sure what the problem is. I oftentimes find that good debates are more often disrupted by the person who insists on this mythic ideal of "unemotional" & civic & rational debate than the person who feels strongly about the issue.
      • _curious_ 7y ago
        "Most theories of the good hold that you are certainly entitled to things just for being born - take your life for instance." Where can more information be found about "theories of the good"? What about this thing we call money - how much are we entitled to and from who? Can anyone explain what the benefit is of living an existence feeling entitled to something tangible such as money?
• kube-system 7y ago
  > What if we had the central bank give everyone an account that was interoperable with the rest of the banking system? Then if you want to hand out money, you just do it. If you want to borrow money, find a lender. Except nobody knows if PPP money is a loan or a handout yet. The criteria for determining that is in the future, and central banks are as equally incapable of time travel as anyone else. That's why they're administered as forgivable loans. All PPP money is a loan right now.
• mihaaly 7y ago
  I agree very much, in any society it is as essential matter as legislation, representation, law enforcement and such. Must be a public service.
• RivieraKid 7y ago
  I don't think it's a good idea, the government sector is usually less efficient than private sector. It would only make sense if the banking market was not competitive but it's not the case.
  • CPLX 7y ago
    > the government sector is usually less efficient than private sector Statements like this require proof.
    • RivieraKid 7y ago
      I don't have a proof, it's a belief based on anecdotal evidence and just thinking about it.
      • xerox13ster 7y ago
        Then use a qualifying statement such as "It seems to me ___" or "I believe ___" Don't make an opinionated statement saying "is" as though it's statement of fact without being able to prove it.
        • RivieraKid 7y ago
          That is implicit, there's almost nothing I'm completely sure of. I would add that qualification if I had low confidence about the claim.
      • jatone 7y ago
        and based on medicare and the post office as reference points you'd be very wrong.
        • RivieraKid 7y ago
          Maybe it doesn't apply to healthcare. I said "usually".
• exabrial 7y ago
  > What if we had the central bank give everyone an account Single point of failure. Single point of power seizure. Single point of abuse for policy/NSA/FBI/DEA/BATF/CIA. As an alternative: Each bank must speak a common language for transactions as part of their charter, aka "ACH". The task to accomplish what you wish simply becomes "Improve ACH to realtime, rather than batch" and a bunch of our problems go away. Furthermore, give banks more freedom as to how they want to interchange money so competition is created to force fees and middlemen down. The nice thing about this approach is there's a fast default path via ACH, but banks are free to innovate elsewhere, improving services.
  • JSavageOne 7y ago
    It's not a single point of failure, it's giving people the option to not bank through a private bank. Private banks already get a bank account with the government (the Central Bank), why shouldn't individuals have that same option?
    • chrisco255 7y ago
      I'm not even sure if central banking will last much longer before collapsing under the seemingly unlimited requests for funding. I notice that people want to pretend like laws of supply and demand don't exist and that everything can be fixed with the money printer. I think this does not bode well for our future in general. The reason to reject having a central bank having direct tentacles into your life is the same reason you don't have the FBI run your email and wireless phone provider. Once you give them that sort of power, they'll start telling you exactly what you can spend your money on, under the auspices of "stimulating the economy". It's a central planning draconian nightmare.
      • imtringued 7y ago
        There is no money printer. Each unit of currency that the central banks flood the market with is backed by an asset of equal value on the balance sheet of the central bank.
• JSavageOne 7y ago
  > What if we had the central bank give everyone an account that was interoperable with the rest of the banking system? Many economists and others have been calling for this [1], and seeing the replies it looks like many countries already implement this. If this existed, then we wouldn't need to funnel 3% of these emergency loans into the private banking industry, a pretty outrageous loss of money for what amounts to some modest paperwork. [1] https://www.npr.org/sections/money/2018/07/11/628173553/fed-accounts-for-all https://www.npr.org/sections/money/2018/07/11/628173553/fed-...
  • naringas 7y ago
    > some modest paperwork. and which nowdays is probably done by a computer system without any paper being involved
• daxorid 7y ago
  > We don't want money laundering Can you explain this? It's never made any sense, at all. 1. If you earn excess unreported income, eventually the IRS will figure it out and come get their cut. 2. If you earn it through criminal means, you're already committing a crime for which, if caught, you will be punished. Why is the act of obfuscating the source of income a crime? Who gets harmed by this, that isn't already harmed by either the potential crime committed or taxes evaded?
  • naringas 7y ago
    also, it seems to me that current money laundering didn't really exist before the early 70s a series of legislations right around the time of declaration of war against drugs (91st USA congress) pretty much made 'money laundering' a thing prior to that, during the prohibition era it wasn't called money laundering yet it was simple tax evasion.
  • sailfast 7y ago
    If you make money laundering easy it becomes much easier to commit crimes and keep your gains, while the volume of the payoff gets much higher. If drug dealers in the 80s could have started hedge funds (or even deposit funds legally) with their shoeboxes of cash, it would’ve been an even crazier ball game.
  • 0xEFF 7y ago
    It's not a crime if the source is legitimate, but if you ask me to hold on to a bag of cash which your friend will retrieve tomorrow, then it's reasonable for me to ask if the cash is legit. Otherwise, I may be harmed by being part of a crime. It's no different for a financial institution holding onto a bag of cash.
  • leetcrew 7y ago
    regarding 1), the point of money laundering is that you can report that income to the IRS without clearly implicating yourself in criminal activity. laundering your money and then not reporting it defeats the purpose. there's nothing inherently wrong with obfuscating a source of income, although it's hard to do this without committing some sort of fraud along the way. it's a (somewhat distasteful, imo) administrative convenience. people who run criminal enterprises have a variety of methods for distancing themselves from the actual crimes they are making money from. it turns out to be a lot easier to catch them doing funny stuff with money than it is to pin any of the original crimes on them.
• sailfast 7y ago
  I’m guessing you’ll end up re-inventing the banking system if you follow this down enough of the complex rabbit holes required here. What do you think a lender is? Why do you think they can lend money?
• bassman9000 7y ago
  https://en.wikipedia.org/wiki/International_Bank_Account_Number https://en.wikipedia.org/wiki/International_Bank_Account_Num... Today's banking, tomorrow is Telcos, the day after... What if the problem is the lobbying?
• JSavageOne 7y ago
  You outline the problem very well. The banking sector has an ENORMOUS amount of power over the economy/society in a way that no other industry does because it literally has the ability to create money out of thin air (by loaning it into existence). The banking industry is the arbiter and credit in our society and decides where money get allocated. This would be fine if it were their own money, but it's not - it's our bank accounts (ie. fractional reserve banking). Unfortunately individuals can't opt out of this because unlike private banks, individuals aren't allowed to open a bank account directly with the government (though these replies show that this is possible in countries like France). The finance industry does not generate real wealth, it is a wealth extracting industry that profits off the spread between the interest rate decided by the central bank and the interest rates and fees it charges consumers. Banks do not create goods or services, they just decide who gets the money to do so, with money that's not theirs. 80% of bank credit goes to mortgage loans (driving up housing prices and saddling homeowners in debt). Banks have gone from 2% of the U.S. economy in the 1950s to 8% by 2008, and 1.5% of the British economy in 1978 to 15% by 2008. The first step to fixing this is to give citizens the ability to opt out of private banks and bank directly with the central bank. Private banks should not be the only ones with this privilege.
  • humaniania 7y ago
    There are tons of different banks and credit unions as perfectly good options. There is a healthy and competitive market. The current system is a great way to create jobs and keep product offerings competitive, which means efficiency for the consumer. Banking is an extremely important industry to society, so it makes sense that they would have a lot of power, and a lot of oversight.
  • bo1024 7y ago
    This and the parent comment seem like pretty strong arguments. If the main differentiator is supposed to be whom banks decide to lend to, this doesn't seem to be working. They are extremely risk-averse about innovating lending or using criteria beyond credit score (to preempt accusations of discrimination, I was told, which is ironic since credit score is a hugely discriminatory system). Anyway, I think I like the idea of a government-centralized deposit and monetary transfer system. This is the direct electronic equivalent of cash. A single national interest rate seems reasonable since current saving account rates are essentially set by the reserve rate today anyway. But I feel there must be a better privatized lending system than the current one though.
• hamilyon2 7y ago
  You miss the trust part. I want to transfer big sum of money, essentially my life savings to someone. Who do I choose for the job: - local post office - some crypto mumbo-jumbo that a lot of criminals use - huge institution with daily income five orders of magnitude more than the sum I am talking about, regulated up to a dollar with 100 years of history of earning international trust - some other option ?
  • battery_cowboy 7y ago
    The local post office, backed by the USG, with hundreds of thousands of employees and deals in billions of dollars per year? That tiny little enterprise? Is that what you're talking about like it's diminutive?
• jariel 7y ago
  What you described is 'retail current accounts' which make up a tiny portion of what 'banking' is. Also, the Fed doesn't 'give out money' really. If the Government wants to 'give out money' it can write a cheque - or - use some kind of IBN/SWIFT style coding to direct deposit. The government needs: better identity management so you can 'login' an 'prove' who you are, where you live. And banks need better routing/transfer. FYI there is 'paperwork' and 'process' involved in doling out money, it might have been better not to use the banks.
• deleted 7y ago
  [deleted]
• LeoTinnitus 7y ago
  Money laundering is still pretty easy to do. If you go through the proper channels and know the reporting laws, it's easy to avoid altogether. Although time consuming and you deal with swaths of physical cash, it's not impractical. You could honestly pay high school students like $20 to convert $1000 cash to a money order or something addressed to your company. They "pay" the company for it's "services" and you wash it through loans and other stuff. Now the trick is to manage it in a way that a prosecutor couldn't convince a jury of structuring. Have an accountant fabricate records and mix it with legitimate purchases and expenses. It's essentially a front...but what corporation isnt one?