Paul Krugman: A Push to Rethink How Banks Work

A genuinely interesting debate on financial reform is taking place. I'm not even sure where I stand. But it's certainly worth talking about.

On their blog, the economists Atif Mian and Amir Sufi drew attention to proposals to either mandate or create strong incentives for 100-percent reserve banking, coming from the Financial Times columnist Martin Wolf and, more surprisingly, from John Cochrane, a professor at the University of Chicago. Equally surprising - at least to me - is that Mr. Cochrane seems to be more aware of the difficulties of the issue.