This paper presents a balance sheet approach to understanding the reform of the financial system to include narrow banking. It was prepared for a conference at the Jerome Levy Economics Institute of Bard College, June 23-28, 1991

As recovery from the present economic crisis begins, policymakers must address what reforms will be made in financial system in order to prevent the reoccurrence of a similar crisis in the future. What will Congress do in response? In terms of long-term financial reform, what is to be expected...

Who should regulate bank holding companies? The recent Treasury proposal to consolidate the federal banking agencies would require that the Federal Reserve give up the power to regulate bank holding companies (BHCs) that it has had since the passage of the bank Holding Company Act of 1956. The...