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Originally posted by OmegaLogos
reply to post by orkson
Personal Discosure: Decentralized decartelized resource backed currency = compressed air!
P.S. Some fire escapes off this planet would also help!
Key attributes of narrow banks include
- 1. no lending of deposits (reducing a key risk materially but constraining return on investment for depositors and shareholders alike)
- 2. extremely high liquidity (typically short-term assets e.g. bonds)
- 3. extremely high asset security (typically government bonds)
- 4. lower interest rates paid to depositors (as a function of the no lending and other constraints)
- 5. possibly specific regulatory framework with higher level of scrutiny and operational/investing restrictions
Additional criteria applied to safe banks include
- 1. no derivatives
- 2. no off balance sheet assets
- 3. high degree of institutional transparency (e.g. continuous real-time disclosure of financial records)
- 4. capped executive salaries
- 5. low risk jurisdictions