The Money View: Shadow Banks and Narrow Banks

The video discusses narrow banking in the American context, focusing on the instability caused by fractional reserve banking. It explains how banks expand credit and money and proposes narrow banking as a solution by eliminating loans and holding reserves or treasury bills. This separation of private credit from money aims to stabilize the financial system.

What would banks be allowed to do under the proposed narrow banking system?

In what way do proponents of narrow banking believe it would lead to greater stability in the financial system?