Separating the casino from the retail bank will not work
The idea of creating a division between so-called "narrow banks" and "investment banks" has gained traction of late. With financial heavyweights such as Paul Volcker, a former Federal Reserve chairman, and Mervyn King, the governor of the Bank of England, backing such a move, the idea has made it onto the front pages of the financial press around the globe.
King's and Volcker's rationale for the division (along with that of John Kay, a journalist) vary. But all include some combination of
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