New deposits backed by central bank money could solve public mistrust

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Narrow banking could unlock the public’s confidence in central banks

The recent implementation of bail-ins in the resolution of four regional banks in Italy has – as expected – given rise to harsh criticism in the country. The backlash is linked to two main issues:

the balance between preserving a competitive banking market free of public interference, while avoiding crises of confidence in the banking system. public awareness of the risks of different forms of investment when entrusting a bank with their money.

These two issues also reflect the basic component