Banking Debate Woes (Part I) — Brian Romanchuk

Summary:
This article was triggered by some discussions I ran into on Twitter. My belief is that the economics literature on banking (with some exceptions) is a failure. From the perspective of advancing knowledge, the best course of action would be to ritually burn the literature, and start over from scratch.(Note: due to the length of this discussion, I am breaking it into (at least) two parts. This first part gives an overview, then turns to the analysis of individual banks.)The core of the problem is that the economics fraternity started from the wrong place, and the incorrect description of banking was enshrined in Economics 101 textbooks. The heterodox literature then responded to the incorrect theory, which then has the unfortunate effect of making the whole discussion even harder to

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