Why do banks keep failing? And can new forms of digital money solve the problem?
Using the collapse of Silicon Valley Bank as a starting point, this session examines the economics of banking, financial fragility, and bank runs. We will explore why banks are simultaneously essential and vulnerable, and why proposals such as narrow banking have long been viewed as a potential solution. The session then turns to stablecoins, arguably the most important recent innovation in payments. Although often portrayed as revolutionary, stablecoins can be understood as digital narrow banks: institutions that promise safety and liquidity while raising many of the same questions that have confronted banking regulators for generations. The discussion will connect recent events, emerging technologies, and current policy debates to address a central question: What should the future of banking and money look like?
