Narrow banking

Narrow banking is a proposed type of bank called a narrow bank also called a safe bank. Narrow banking would restrict banks to holding liquid and safe government bonds. Loans would be made by the other financial intermediaries. That is, the deposit taking and payment activities would be separated from financial intermediation activities. Narrow banking is a proposed type of bank called a narrow bank also called a safe bank. Narrow banking would restrict banks to holding liquid and safe government bonds. Loans would be made by the other financial intermediaries. That is, the deposit taking and payment activities would be separated from financial intermediation activities.