I don't quite understand why people have difficulty with the existence of the Federal Reserve. I suspect it's because they are navel gazing. After all, the Federal Reserve doesn't exist in the vaccuum of the USA, but as a powerful institution within the global economy. I suspect that they express a sense of powerlessness because they can't vote somebody else's money into a direction favorable to themselves or their perceived self-interest. I believe that a lot of Americans have been convinced that their voices are more important than they actually are. They are hearing the siren call of aggregation.
In the meanwhile, it is surprising that they don't do local banking when they could. I am involved in some banking business myself, and I am discovering that many small banks have been held hostage to old technology. One of my customers is one such bank and I was surprised to learn last week that they still use RPG. All that aside, my book says think networked, act locally.
Why doesn't America have a Savings & Loans industry? Well because it was mismanaged it into the ground. The history of the Resolution Trust Corporation is something I will get into. Banking has always been interesting to me since I was a teen, so it's rather fascinating to me that this corporation sold off a third of a trillion dollars of assets. That's rather amazing.
OK So here's what makes sense to me.
1. Specialty Brokerage & Hedge Funds
Private banking and wheel of fortune for the Leisure Class, titans of industry & global capitalists. Step right up, get your tickets. No Limits. Minimal regulation. If the best minds on the planet can't keep the criminals out, tough boogers.
2. Investment Brokerage
401K, IRAs, and standard investments. I would look at firms like Edward Jones and bring back companies like Brown & Company. Conventional wisdom investment with some safeguards for the small businessman and net worth < 10 million.
3. Global Banks
International finance. Want to build an island resort, an oil platform, an airport, a railroad, a coal mine? These are your guys. Keeps America competitive and use that dollar. Chase. Citi. Wells Fargo.
4. Interstate & Business Banks
Think Washington Mutual, before it imploded, PNC, Wachovia, Bank of America 15 years ago. Good sized healthy business banks. 50 of these would serve us just fine.
5. Savings & Loans
No more Countrywide. Local home loans, certificates of deposit, 529s, New Tax deferred savings instruments etc. This is the new nest-egg banking where risks are minimized and savings are encouraged. No interstate business.
6. Utility Banking
Retail checking, savings, car loans, boat loans, credit cards, ATMs, collateralized loans. Insured.
7. Credit Unions
As is with incentives to have more.
I think there's no such thing as 'investment banking' but what do I know. It seems to simple minded me that people can invest one place and bank someplace else. Two aims, two businesses.