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Yes, it's a confusing proposal - but not when compared to what we have now; a financial industry run by "To-Big-To-Fail Banks" able to loot the public treasury at will.  Never to Big to Bail, and taxpayers voted for four more years of looting.  Limited Purpose Banking is based on equity.  Which is quite different from the fractional-reserve-lending model used by the To-Big-Fail Banksters. "The history of banking is a long and sorry record of promises that can't be kept - promises that were either overly optimistic or outright fraudulent. Since banks are leveraged, failing to deliver on their promises leads them to collapse. But unlike standard bankruptcies, bank failures produce enormous economic fallout.   There's a reason. Banks not only market financial products. They also make financial markets. Markets, be they for apples or loans, constitute critical public goods whose provision should not be jeopardized.     Making a market -- getting buyers and sellers to meet at the same time and place always represents a feat of coordination. The main purpose of banks is to effect financial coordination - to bring together borrowers and lenders and investors and savers.     When banks fail, particularly large ones, this coordination breaks down. Moreover, bank failures can be contagious. Any given bank's failure raises the prospect that fraud or very poor judgment was at fault and that other banks are engaged in the same practice. This leads to runs on, actually away from, banks in general. In addition, since banks borrow and lend to one another, the failure of bank A can bring bank B down if A owes money to B.     Worst of all, financial collapse, even by a few major financial players can coordinate non-financial companies as well as households on the belief that times are bad. And when millions of separate firms and tens of millions of households start expecting bad times, they take actions to make bad times happen. Thus, the state of confidence, what Key