Ethiopia is the latest nation where an international aviation accident is in sharp focus, but the country itself is treated merely as the hazy backdrop and tragic context for a larger geopolitical story. This one involves Boeing, China trade wars and the credibility of American regulatory institutions.

In its death note to narrow banks (link to Federal Register where you can post comments; previous post), the Fed claimed charmingly that retail deposit rates are fully competitive, so we don't need a narrow bank option to help spread the interest on reserves to deposit rates. In the Fed's view, the fact that banks pay so little compared to reserves just reflects the costs (many of them regulatory!) of servicing retail accounts.

Suppose an entrepreneur came up with a plan for a financial institution that is completely safe -- it can never fail, it can never suffer a run, it offers depositors perfect safety with no need for deposit insurance, asset risk regulation, capital requirements, or the rest, and it pays depositors more interest than they can get elsewhere.