[bko]

That's called a narrow bank. It's one of those stories you hear about that really make you question the incentives of these large government organizations like the fed. Makes you realize that their goal is not necessarily aligned with the average every day citizen, but rather keeping up this economic system we seem to be stuck in:

> The Fed raises three main objections. 3 The first is macroeconomic: The Fed worries that narrow banks could mess with the implementation of monetary policy, because if they succeed they will keep a lot of money at the Fed, increasing the size of its balance sheet...

> Second, it worries that narrow banks will take funding away from regular banks, making it harder for those banks to trade stocks and bonds (a business largely funded by repo), and maybe even making it harder to make loans...

> Third, the Fed worries that having too safe a bank would be bad for financial stability: In times of stress, everyone will flee from the regular banks to the super-safe narrow banks, which will have the effect of bringing down the regular banks

https://www.bloomberg.com/opinion/articles/2019-03-08/the-fe...