This article of hers claims in relation to full reserve, “The problem . . . is that we are basically reducing banks to venture capitalists. That’s fine. But if depositors are going to bear all the risk, it makes sense their upside exposure should not be capped to a specific return.”
Well hang on: if depositors bear all risks, then banks are not acting as “venture capitalists” as that term in normally understood are they? (I assume the term “venture capitalist” means an entity that bears risk.)
Secondly, the advocates of full reserve (certainly Positive Money and Laurence Kotlikoff) do not advocate that “upside exposure should be capped”.
Next, she says, “A much better system would be something of a sukuk system where the investors returns are linked to his effective ownership of the asset and thus its cash flow.” Well that’s exactly what Positive Money and Laurence Kotlikoff do advocate!!!
Seems the advocates of full reserve have done vastly more home work than Isabella Kaminska gives them credit for.
Given the large number of mistakes that Kaminska manages to cram into above 70 words near the start of her article, I can’t summon up the will to read any further.