Part 4/10:
The discussion about whether fractional reserve banking remains a viable model today leads to a reflection on systemic risks in the digital age. With rapid advancements in technology, the pressures on traditional banks to innovate are immense—and yet, regulatory environments appear to obstruct change.
The Clash of Innovation and Regulation
The conversation turns to regulatory capture and the resistance to innovation within the banking sector. Long criticizes the current regulatory framework, which often serves to protect incumbent banks rather than foster competition and technological progress. This stagnation is further exacerbated by regulators' lack of familiarity with digital advancements.