The customers were very happy. One told me "man, it is all about payroll, if you do not make payroll you face jail". One very thoughtful entrepreneur said: "look, banks should not play with other people's money, banks should just be banks".

🐦🔗: https://n.respublicae.eu/lugaricano/status/1635329380439449601

I asked him what he meant. He did not see at all, in his mind this was not the image, his role as ensuring the deposits were safe there. This had to be the case, by definition.

🐦🔗: https://n.respublicae.eu/lugaricano/status/1635329384855814144

Now, the question is: if we do not think an extremely smart entrepreneur in charge of tens or hundreds of millions of dollars is able to monitor the bank, why the shop keeper or restaurant owner?

If the shop keeper or restaurant owner is not able, why anyone else?

🐦🔗: https://n.respublicae.eu/lugaricano/status/1635329386269523968

I think the 250K limit on deposit insurance died today. Germany took the same decision in the crisis and precipitated trouble in all other Euro Countries.

But, once more, the political decision is taken: deposit insurance is unlimited. https://www.reuters.com/article/financial-germany-deposits/update-1-german-govt-to-guarantee-deposit-accounts-ministry-idUSL514023820081005

🐦🔗: https://n.respublicae.eu/lugaricano/status/1635329387292946433

But this has huge implications: Banks become a utility. They are making bets with the house money. This model is untenable.
I believe there is a better way to do this, around the Chicago plan. I will write soon about this.
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https://www.elibrary.imf.org/view/journals/001/2012/202/001.2012.issue-202-en.xml#:~:text=At%20the%20height%20of%20the,100%25%20reserve%20backing%20for%20deposits.

🐦🔗: https://n.respublicae.eu/lugaricano/status/1635329388584792066