Narrow banking is a concept for a bank that holds 100% reserves against deposits. It attracts people who are deeply concerned about the symbolic content of “money” on both the left (e.g. Positive Money) and the free market right (the Chicago Plan). Devotees of narrow banking are happy to talk your ear off about how their plans work, so I leave finding out more as an exercise as a reader. I just want to focus on the core principle: they want banks to not take risks lending deposits, so that “money” remains “money”: a numeric entry that corresponds in a 1:1 fashion to a claim on a “monetary asset,” like a gold coin or claims on specific gold coins, and not a messy credit relation.
You write, "In a country with a somewhat modern payments system (e.g., not the United States) ..."
Can you state what you think distinguishes non-modern, "somewhat modern" and modern payments systems and why you apparently believe the U.S. falls into the non-modern category?
(I don't mind your being snide about the U.S. We probably deserve it. But I think you need to clarify/defend your position in this instance.)
You write, "In a country with a somewhat modern payments system (e.g., not the United States) ..."
Can you state what you think distinguishes non-modern, "somewhat modern" and modern payments systems and why you apparently believe the U.S. falls into the non-modern category?
(I don't mind your being snide about the U.S. We probably deserve it. But I think you need to clarify/defend your position in this instance.)