

Amar Bhide "In Praise of More Primitve Finance" - skmurphy
http://www.bhide.net/financial_crisis_2008/bhide_praise_of_primitive_finance.pdf

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skmurphy
Core Proposal:

Let’s revive the radical idea of narrow banking and tightly limit what banks
(and any other entities that raise short term deposits from the public) can
do: nothing besides making loans--after old-fashioned due diligence--and
simple hedging transactions. The standard would simply be whether the loan can
be monitored by bankers and examiners who do not have PhDs in finance.

Anyone else: investment banks, hedge funds, trusts and the like can innovate
and speculate to the utmost, free of any additional oversight. But, they would
not be allowed to trade with or secure credit from regulated banks, except
through prudent loans whose collateral and terms can be monitored by run of-
the-mill bankers and examiners.

