Skinny Fed Master Account
A proposal for a ‘skinny’ Federal Reserve master account may lead to a revival of the narrow banking model. This concept focuses on providing safe and liquid banking services. The ‘skinny’ account would allow banks to hold reserves without engaging in lending activities. By enabling a straightforward deposit structure, it could help mitigate risks associated with traditional banking practices. Such an approach could enhance financial stability by separating payment systems from riskier lending operations. Advocates believe this model could foster a more resilient banking environment, limiting systemic risks.
