With the Federal Reserve in control, is it possible to open a bank that offers 100% reserve banking.?

Question

This would be a bank that is not a memeber of the Federal Reserve System. The Federal Reserve is neither federal, nor a reserve. They print our miney out of control and are the lender of last resort to the banks. The banks in this country are inherently insolvent. They only hold a fraction of your money. Which means if there was a "run" on the banks, you may not get your money back.

Answer 1

Yes, absolutely. Any bank today can offer 100% Reserve banking.

However consumers do not care for it because, instead of getting interest on the deposits, they have to pay the bank to safeguard their money.

In fact, before 1980, most checking accounts were that way. When S&L came out with interest-bearing NOW accounts, consumers were leaving bank checking accounts in droves. The banking laws were changed to reduce the reserve requirement in checking so banks could offer interest on deposit.

You could get 100% reserve on your deposit; just put your money in a safe deposit box and take money out when you need it. Of course, you'd have to pay a fee but, hey, you would be sticking up for an important principle, right?

Re: The Federal Reserve is neither federal...

Mostly not true though the branches can be considered member-owned corporations.

To summarize:

The Federal Reserve System is a congressionally-chartered agency like the USPS and NASA. It is organized with a 100% government agency at the top (the Board of Governors), branches beneath them that are organized like corporations with member banks as shareholders.(Ref: http://www.federalreserveeducation.org/f... , http://www.federalreserve.gov/generalinf... )

The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress. It operates per it's charter and laws set by congress. it is overseen by congress. There is no structure or mechanism for private ownership at this level; it is a government agency. You can confirm this from a number of government sites that list it as a government agency (e.g. http://www.whitehouse.gov/government/ind... Board members are forbidden by law to have any economic interest in a private bank. (Ref: Title 12 chapter 3 of the U.S. Legal Code). The Board determines monetary policy and provides high level oversight of the branches.

The 12 branches can be considered highly regulated private corporations. Member banks are required to buy shares in their branch. Each bank has one vote.  They can vote for 6 of their 9 board members, the other 3 are appointed by the Board of Governors.  Though the branches are called non-profit, the member banks get a standard 6% dividend on their shares. The remaining 'profit' is turned over to the Treasury at the end of the year.

For confirmation on this, check out how Hoovers classifies them:

http://www.hoovers.com/free/search/simpl...

- Re:  nor a reserve

Actually if you check the latest FR balance sheet, you will find they currently have about $200B in reserves. See http://www.federalreserve.gov/releases/h...

- Re: The banks in this country are inherently insolvent (because they have only a fraction of your money)... you may not get your money back.

I think you may be exaggerating a bit even in these tumultuous times. Has anyone ever lost money in an FDIC insured account (when within the insured limits)?