Financial system- categories of activities

The financial system is engaged in a wide variety of activities.

One approach to managing the financial system (goals such as insuring stability) is to to keep  compartmentalized these activities into separate companies. For this reason, decomposition of the activities of modern banks into functional categories is useful.

Banking
Banks are public/private partnerships, established for the public purpose of two functions:


 * facilitate a payments system (smooth money flows, maintaining par)


 * provide loans to credit-worthy customers.

MMT Banking requirements
List (including rationale)Bill Mitchell's this documentWarren Mosler guidelines in this document
 * Banks should only be permitted to lend directly to borrowers. All loans would have to be shown and kept on their balance sheets.
 * Prohibit third-party commission deals which might involve banks acting as ‘brokers’ and on-selling loans or other financial assets for profit.