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> there isn't a graceful way to ease from fractional reserve to narrow banking Wouldn't the graceful way be to... simply allow narrow banks to have fed accoun

• JumpCrisscross 4y ago
  > Wouldn't the graceful way be to... simply allow narrow banks to have fed accounts? No. As the Fed details, in a crisis, deposits would drain into the narrow bank. Permitting a narrow bank by itself is de-stabilising. (There are a myriad of solutions to the issues introduced. From paying a lower return on non-risk taking reserves to limiting accounts to natural persons. But the point is the systemic effects have to be thought out in advance.)