Jimmy Stewart Is Dead -- Ending the World's Ongoing Financial Plague with Limited Purpose Banking

LSE public lecture

Let's call a spade a spade. Today's financial system, with its limited liability, insider rating, political kickbacks, director sweetheart deals, non disclosure, and internal corporate raiders, was built for hucksters -- hucksters who systematically manufactured and sold trillions in fraudulent securities, grabbed hoards of loot, and left the public to pick up the pieces.

Limited Purpose Banking (LPB) takes the con out of Wall Street's con job by limiting banks, insurers, and other financial corporations to their legitimate purpose -- financial intermediation. LPB makes Wall Street safe for Main Street by transforming all financial corporations into pass-through mutual funds, which are, themselves, small banks with natural firewalls -- 100 percent capital requirements in all states of nature.

LPB is fully compatible with modern finance, credit provision, and leverage. Its adoption will restore sustained economic growth by providing the financial sector the one thing it so desperately needs, but will never be able to buy -- trust.

Laurence J. Kotlikoff is a professor of economics at Boston University and author of Jimmy Stewart Is Dead -- Ending the World's Ongoing Financial Plague with Limited Purpose Banking. More information about him can be seen at Laurence J. Kotlikoff.

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