*  *  *  It is a pleasure to be here today to talk about issues and programs of mutual interest, with a focus on the Federal Reserve’s work to strengthen our support of minority-owned depository institutions. The Federal Reserve recognizes the important role that minority-owned banks play in the financial services market through the services they provide to their communities.
Some therefore propose to move from fractional banking to a so-called “sovereign money system” or to “narrow banking”, where every commercial bank deposit would be fully backed by central bank money. Proponents of a sovereign money system argue that commercial banks would lose their capacity to create money in the form of demand deposits, becoming simple intermediaries between savers and borrowers.