Tuesday, 13 November 2012

Only full reserve banks should be insured

If it doesn't prohibit bank lending the government should not give banks deposit insurance. The government should extend deposit insurance only to banks which agree not to make loans... if it should extend deposit insurance at all. If there should be deposit insurance it should be only for full reserve banks. Fractional reserve banks should not be given deposit insurance. There should be no insurance for fractional reserve banks.

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