The Rise of the Network Society
The Rise of the Network Society
The Economics of Electronic Commerce
The Economics of Electronic Commerce
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This is an opinion paper. It argues that conditions are ripe for the reinvention of a core component of the banking system by having an autonomous institution to house the deposit accounts of individuals and companies. This institution would own and operate the payment and settlement systems. There would be no government guarantee for deposits with commercial banks, thereby removing one important factor of moral hazard. Governments would not need to worry about the collapse of the payment and settlement systems. The proposed set-up would constitute an important building block in a new international financial architecture. Banks could continue to thrive but they would need to innovate and earn their revenue by providing value-added services to their customers.