The Weekley Peg: The Fed's anti-narrow bank agenda

Economist John H. Cochrane of Stanford University argues the Fed doesn't like narrow banks for an obvious reason: The model reduces bank income.

Executive summary:

This week’s issue dives into the growing battle lines over the future of money. In Brussels, Fernando Navarrete clashed with ECB board member Piero Cipollone over the digital euro, with Navarrete warning of mounting costs and fragile economies, and Cipollone countering that central bank backing will keep the project viable. In academia, Stanford’s John Cochrane sharpened the case for stablecoins as modern-day narrow banks, accusing the Fed of shielding big lenders at depositors’ expense. And in industry, Trump’s flagship World Liberty Financial venture is under fire after freezing out one of its biggest backers, Justin Sun, in a $100 million dispute that raises awkward questions about governance and loyalty. Together, these stories show how political standoffs, academic arguments, and token turmoil are converging to redefine the money wars.