Requiring banks to issue long-term debt could make customers safer
Banks have been consolidating for a century. This is by design.<p>&gt; <i>The commercial-bank population reached 14,496 in 1984. It turns out this was a post-1940 peak that may never be reached again. Between 1984 and 2020, the number of banks decreased by 70%.</i><p><a href="https:&#x2F;&#x2F;www.stlouisfed.org&#x2F;en&#x2F;on-the-economy&#x2F;2021&#x2F;december&#x2F;steady-decline-number-us-banks" rel="nofollow">https:&#x2F;&#x2F;www.stlouisfed.org&#x2F;en&#x2F;on-the-economy&#x2F;2021&#x2F;december&#x2F;s...</a><p>The number of new banks that have formed is also anemic. Less than 100 new charters over last 10 years, when previously 100 per year was typical.<p><a href="https:&#x2F;&#x2F;banks.data.fdic.gov&#x2F;explore&#x2F;historical?displayFields=STNAME,TOTAL,BRANCHES,New_Char&amp;selectedEndDate=2022&amp;selectedReport=CBS&amp;selectedStartDate=1934&amp;selectedStates=0&amp;sortField=YEAR&amp;sortOrder=desc" rel="nofollow">https:&#x2F;&#x2F;banks.data.fdic.gov&#x2F;explore&#x2F;historical?displayFields...</a><p>The government is consolidating banks. All banks have had ever more rules and regulations in the last 30 years, but the end result is fewer, larger banks that are more tied in with the state.<p>Is this good or bad? Opinions differ. What is perplexing is the government has not allowed a “narrow bank” that simply passes deposits into treasuries, which would be much safer. You would also think that with the rapid change in technology and innovation over the past 30 years there would be <i>more banks</i> rather than less - freedom of choice and innovation and whatnot - but that is not the case.<p><a href="https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;Narrow_banking" rel="nofollow">https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;Narrow_banking</a><p><a href="https:&#x2F;&#x2F;johnhcochrane.blogspot.com&#x2F;2018&#x2F;09&#x2F;fed-nixes-narrow-bank.html?m=1" rel="nofollow">https:&#x2F;&#x2F;johnhcochrane.blogspot.com&#x2F;2018&#x2F;09&#x2F;fed-nixes-narrow-...</a><p>I believe that fractional reserve banking based on fiat currency is inherently risky. However the state does not make it easy for me to avoid this. However it is possible for even the moderately wealthy person to take safe action to reduce such risk.