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Limited Purpose Banking

Cyprus -- The Nightmare Scenario

Laurence J. Kotlikoff | Posted 05.24.2013 | World
Laurence J. Kotlikoff

The Cypriot banks did what all banks do. They gambled. They borrowed money by taking in deposits as well as selling bonds, promised to repay, and then invested in assets they were sure would pay off. These assets included lots and lots of Greek government bonds.

Mr. Draghi's Dangerous Confidence Game

Laurence J. Kotlikoff | Posted 01.08.2013 | Money
Laurence J. Kotlikoff

European Central Bank (ECB) Chairman Draghi has a very big agenda. Armed with only a printing press, he's pledging to directly bail out the GIIPS (Greece, Italy, Ireland, Portugal and Spain) and indirectly bail out their economies.

Putting an End to Faith-Based Banking

Laurence J. Kotlikoff | Posted 09.09.2012 | Business
Laurence J. Kotlikoff

There is not a single official in the U.S. or Europe brave enough to take on the bankers and say what needs to be said: If you want to gamble, be our guest. But do so on your own time, in your own home, and on your own dime.

We Are Our Children's Keepers

Laurence J. Kotlikoff | Posted 08.28.2012 | Politics
Laurence J. Kotlikoff

Ask red Republicans and blue Democrats what they value most and their answer will be the same -- their children. Strange, then, that both parties have devoted the postwar to spending enormous amounts of their children's money.

Mervyn King Has It Right -- Our Financial System Is the Worst

Laurence J. Kotlikoff | Posted 05.25.2011 | Business
Laurence J. Kotlikoff

We have the worst possible banking system because it is built on two pillars of straw -- proprietary information and leverage.

It's the Snake Oil, Stupid

Laurence J. Kotlikoff | Posted 05.25.2011 | Business
Laurence J. Kotlikoff

The financial industry, aided and abetted by rating companies on the take, politicians on the make, and regulators on a break, systematically manufa...

Jimmy Stewart Is Dead

Laurence J. Kotlikoff | Posted 05.25.2011 | Business
Laurence J. Kotlikoff

Let's consider an alternative financial system. Limited Purpose Banking limits banks, insurers, and all other financial corporations to one job and one job only -- financial intermediation.

Bilking The Summers-Geithner Plan: How Wall Street Will Use It For Profit

The Boston Globe | Laurence J. Kotlikoff | Posted 05.25.2011 | Business

IT'S ONE thing for the US Treasury Department to overpay banks for their toxic assets on the prayer that bank shareholders will do something besides p...