Bank lawsuit pushes Fed to rethink monetary system
The Narrow Bank has the potential to alter how the Fed conducts monetary policy
A startup called The Narrow Bank (TNB) has filed a complaint in federal court against the Federal Reserve Bank of New York, as it attempts to open a Fed account, in the process questioning what a safe deposit really is. The case throws light on a unique business model that could change the future direction of the financial system.
TNB was founded by a former executive at the New York Fed, James McAndrews. During McAndrews’s 28 years at the Fed he worked on several papers discussing the
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