But it is not so far-fetched to think that, with time and sufficient economic incentive, the financial, technological, and regulatory barriers to the disintermediation of prudentially regulated banking firms could be overcome.
Indeed, we have observed some investment funds exploring the possibility of disintermediating dealers by lending cash against securities  5  See, for example, Gary Gorton and Andrew Metrick (2010), “Regulating the Shadow Banking System,” Brookings Papers on Economic Activity (Washington: Brookings Institution, Fall).