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Calls for "payment banks" are spreading in the wake of the Silicon Valley Bank (SVB) debacle and the teetering of other "community banks". "It's tempting in light of SVB's failure to assume that the insured deposit limit needs to be raised, but that solution creates new problems. A better approach would be for the U.S. to follow the example of other countries and create "payment banks" that take little-to-no risk, are highly regulated, and have access to the payment network. They would be a place where companies could park funds - like venture capital investment earmarked for payroll - without exposing themselves to the risks that normal banks create."

However, the Federal Reserve has been blocking non-lending banks from accessing Fed payment systems, though, which means the "safe banks" either cannot operate at all or cannot provide the very "safe banking" services that consumers want. Custodia Bank is one such bank, and its CEO Caitlin Long makes an interesting point about the soon-to-be-launched FedNow fast payments platform: "In the thick of today's social media-accelerated, online-banking accelerated banking crisis, the "borrow short-term and lend long-term" model is less stable than it has ever been. And it's about to become even less stable - because the speed of money movement in the U.S. is scheduled to accelerate this July, when the new FedNow payment system comes online. Intended to replace Fedwire, FedNow will allow depositors to access their bank deposits 24/7/365. Just imagine how much worse today's banking crisis would be if panicked depositors could move their funds during the news-filled weekends. [