Banking in uncertain times
So, I&#x27;m a layman here, but I feel like he makes narrow banking (i.e. full-reserve or maturity-matched banking) sound more dangerous than it probably is, for instance:<p>&gt; Take an exploding mortgage, the only way to finance homes in a dystopian alternate universe. It’s like the mortgages you are familiar with, except it is callable on demand by the bank. If you get the call and can’t repay the mortgage by the close of the day, you lose your house. What did you do wrong to make the mortgage explode? Literally nothing; exploding mortgages just explode sometimes. Keeps you on your toes.<p>It sounds to me like this could simply be solved with mortgage insurance. Granted, that insurance might be more expensive than it is now, but when a mortgage explodes you end up owning your house outright. Seems like not a bad deal. To reduce <i>their</i> risk (and consequently the cost of the insurance) the insurer would probably take on responsibility for finding alternate lending in the case of the loan being called, and the home owner would never hear about it until after the new lending was secured.<p>I&#x27;m sure there would be other problems, but it is not at all clear to me that those problems are worse than the ones we have now.