WSJ says Cypriot bank depositors should become shareholders.

This Wall Street Journal article says Cypriot bank shareholders and bondholders should be wiped out with large depositors bearing the remaining losses. Plus the latter would get shares in exchange.

Well done the WSJ. But just one minor point: their proposal is what would take place AUTOMATICALLY under full reserve banking.

Anyway, congratulations to the WSJ. Better late than never.

But here’s an even better idea. Why not give depositors, large and small, a CHOICE as to whether they want to bear the above risk? That is, let depositors CHOOSE whether they want their money to be 100% safe, or whether they want to take a flutter. What could be fairer?

And the latter choice is offered both in the full reserve system advocated by Laurence Kotlikoff and (a slightly different full reserve system) by Positive Money, Richard Werner and the New Economics Foundation.