Abstract
Hundred percent reserve transaction banking system is proposed with tax-free interest on demand deposits and interest bearing reserves. To eliminate shadow banking arrangements, a 100% tax on net interest income is proposed for limited liability businesses. All financing of businesses would be mutual as currently most is. With this arrangement there would be no bank runs associated giving rise to a financial crisis.
Original language | English (US) |
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Pages (from-to) | 109-111 |
Number of pages | 3 |
Journal | Journal of Economic Dynamics and Control |
Volume | 49 |
DOIs | |
State | Published - Dec 1 2014 |
Keywords
- 100% Reserve banking
- Monetary policy rules
- Transaction banks
ASJC Scopus subject areas
- Economics and Econometrics
- Control and Optimization
- Applied Mathematics