Larry Kotlikoff and I are proposing Limited Purpose Banking – a top-to-bottom reform of the financial system – including banks, near banks, investment banks, private equity hedge funds, insurance companies, etc. A brief description is at the New Republic web site and a fuller description is at Larry's site.
 
Here's the idea. No one should be able to put you at risk without your knowledge or consent. Individuals should be free to take any risk they like and our financial institutions should facilitate risk taking. But institutions should not be able to use your funds to make highly leveraged, risky gambles that you know nothing about.  Nor should they be permitted to gamble at the taxpayer's expense.  

The rest is below the fold. Continue reading Reforming the Financial System →