[gruez]

>There really is no need for the charade of banks now that electronic databases are very solid technology. Their whole role in transmitting and keeping an account of money is surely reproducible by the federal government at very little cost (maybe even lower cost due to not needing FDIC and all that infrastructure) without having to pay a middleman.

Banks' job isn't just keeping money safe and doing transactions. It includes maturity transformation as well.

[1] https://en.wikipedia.org/wiki/Maturity_transformation

[lotsofpulp]

I should have written "There really is no need for the charade of FDIC insured banks now that electronic databases are very solid technology."

I am not seeing the necessity of the federal government backstop to these businesses.

[gruez]

> I should have written "There really is no need for the charade of FDIC insured banks now that electronic databases are very solid technology."

What does this have anything to do with maturity transformation? Are you simply trying to say that we don't need banks to do maturity transformation, and they should stick to handling transactions?

[lotsofpulp]

I am saying we don’t need the federal government to backstop businesses just so people do not “lose” money.

Money is electronic, the government can handle electronic money accounts directly, and skip paying businesses for no reason.

Banks or whatever other financial businesses can continue to sell maturity transformation services, without FDIC insurance.