Tag: Postal Service

Dialing for Dollars: Solving CBDC’s Equality Conundrum

~ Karen Petrou ~ 1 Comment

By Karen Petrou

  • CBDC advocates tout its inclusiveness, but the digital divide is a profoundly exclusionary impediment to CBDC access for LMI, disabled, older, and rural households. 
  • Centralized deposit-taking and payments via the Post Office and/or Fed pose challenges to personal privacy and even freedom of expression that, if not averted in initial design, could come to pose significant political and governance risk.  Lack of private competition also presents discrimination risk based on pricing or other terms not subject to outside scrutiny.
  • If CBDC succeeds as some envision it, then lending will come either from the federal government – Big Brother problems of still more concern – or capital-markets sources outside the perimeter of safety-and-soundness and often also consumer-protection regulation and enforcement.
  • A CBDC in which the Fed acts as an open-source utility corrects for many current inclusion, governance, and intermediation obstacles to payment-system speed and efficiency. 
Continue reading “Dialing for Dollars: Solving CBDC’s Equality Conundrum” →

Trying to Get By While Black

~ Karen Petrou ~ Leave a comment

By Karen Petrou

  • African-Americans were better off before the civil-rights era began than they were in mid-2019.
  • Truly huge disparities lie between white and black Americans in terms of income, wealth, and inter-generational mobility.
  • And that was before COVID eviscerated low-income households of color from both a health and economic point of view.
  • It’s past time for equality-focused financial policy, starting first with Equality Banks.

Continue reading “Trying to Get By While Black” →

Public Banking Under a Blue Wave

~ Karen Petrou ~ 1 Comment

By Karen Petrou

In a blog post this summer, we assessed the history of U.S. public banks over three centuries.  We concluded that, “The best way to ensure that financial intermediation advances social welfare is to define a carefully-constrained charter, mandate transparent limits on self-dealing up front, and ensure that the bank is fit for purpose under reasonable rules that ensure long-term profit in concert with effective public service.  Public subsidies to support public service make sense, but only when sufficient regulation and private-sector discipline constrain the natural self-serving instincts of all-too-many politicians.”  Maybe so, but sizeable minorities of voters this November said that they so distrust private banks that they want a public alternative no matter the controls that might apply.  In a blue-wave mood, federal legislators are listening.  Continue reading “Public Banking Under a Blue Wave” →

How to Craft a 21st-Century Equality Bank

~ Federal Financial Analytics ~ 6 Comments

By Federal Financial Analytics

Reflecting a lot of questions and commentary, the American Banker last week published an op-ed by Karen Petrou showing how to build the bankers’ banks to solve at least some of our economic-inequality problems.  Many proposals seek to do so via the U.S. Postal Service, but an Equality Bank is at least as powerful and comes only from the private-sector. Continue reading “How to Craft a 21st-Century Equality Bank” →

Vollgeld as Voldemort: Is the Swiss Villain Coming for American Banking?

~ Karen Petrou ~ 1 Comment

By Karen Shaw Petrou

On Sunday, June 10, Swiss voters resoundingly rejected “Vollgeld” – a sovereign-money referendum that would have made the Swiss National Bank an all-powerful arbiter of money and credit.  Defeat notwithstanding, Vollgeld is just a test run.  In this blog post, we consider Vollgeld’s impact with particular attention to the U.S.  Any doubts that its impact could be significant is dispelled by a brand-new paper laying out a U.S. Vollgeld from a think tank with ties to Sen. Warren – a national leader of progressive Democrats with considerable power to influence thinking, if not, for now, actual legislation.  Continue reading “Vollgeld as Voldemort: Is the Swiss Villain Coming for American Banking?” →