Luis Garicano, a former Member of the European Parliament, now Visiting Professor of Economics at Columbia University and Chicago Booth, shares his insights into the current banking model after the collapse of Silicon Valley and Signature Bank.

In his address, Garicano discussed the flaws of the current banking model and proposed a solution to address these issues.

Garicano began his speech by describing his visit to a bank in Silicon Valley on March 11. He saw a large number of entrepreneurs queuing up to meet payroll and ensure the smooth running of their businesses.

Garicano noted that the bank was operating under special conditions, with a representative handing out pieces of paper to everyone, assuring them that the bank was a Federal bank and that there was nothing to worry about.

Garicano went on to question the reasoning behind the $250,000 limit on deposit insurance. He asked why a limit would be set, preventing entrepreneurs and small business owners from accessing all the funds they needed to operate their businesses. Garicano stated that this limit showed that the current banking model was broken and unsustainable.

On March 13, 2023, Luis Garicano, a former Member of the European Parliament and Full Professor of Economics, gave a speech at Stanford University in Palo Alto, CA, USA. In his address, Garicano discussed the flaws of the current banking model and proposed a solution to address these issues.

Garicano began his speech by describing his visit to a bank in Silicon Valley on a Saturday morning. He witnessed a large number of entrepreneurs queuing up to meet payroll and ensure the smooth running of their businesses. Garicano noted that the bank was operating under special conditions, with a representative handing out pieces of paper to everyone, assuring them that the bank was a Federal bank and that there was nothing to worry about.

Garicano went on to question the reasoning behind the $250,000 limit on deposit insurance. He asked why a limit would be set, preventing entrepreneurs and small business owners from accessing all the funds they needed to operate their businesses. Garicano stated that this limit showed that the current banking model was broken and unsustainable.