The central bank would undoubtedly capture dominant market share of utility or ‘narrow banking’, but only because the public sector is the least cost provider of the service. Without any subsidies, implicit or otherwise, the central bank is the cheapest, safest provider of these services in the market. Not only would the resulting banking system have much lower costs and greater efficiency, not only would it throw off 10s of billions of $ in revenue to government, it would be a safer, more rational system playing much better to the respective strengths of public and private sectors.

• Uncategorized