What do you think? Leave a respectful comment.

Is Limited Purpose Banking Being Considered a Possible Reform?

Question: Is ‘limited purpose banking’ an idea under consideration in the new financial reform legislation?

Paul Solman: I assume you’re talking about Boston University economist Larry Kotlikoff’s notion of turning bank accounts into mutual funds, featured here recently. If so, the answer is “no,” though the idea has gained some attention in the United Kingdom, due to the attentions of Mervyn King, Governor of the Bank of England. Now if a comparable U.S. figure like, say, Paul Volcker were to sign on, it might become a live proposal in America. But right now, the idea of limited-purpose banking is just that: an idea.

The Latest