|
|
|
|
A Proposal to Deregulate Banking: Comment on Thomas
By Biagio Bossone
Introduction
Hugh Thomas's proposal in the Fall 2000 Cato Journal for a comprehensive reform package to deregulate banking—with a view to strengthening market discipline on financial intermediaries, reducing their incentive to moral hazard, and enhancing public trust on money—has several drawbacks. In what follows, I will point to those drawbacks and argue that Thomas's proposal, if implemented, would suppress the major benefits associated with banks' power to create money.
Full Text (PDF, 7 pages, 37 KB)