Banks need more capital and they need better capital. This is exactly what the new Basel rules prescribe. To enable banks to fail without disrupting the financial system, we need resolution mechanisms. At the international level, the Financial Stability Board has published relevant principles. At the European level, a Single Resolution Mechanism is under construction.
Other countries in Europe have already seen this happen. In the Netherlands, cash accounted for a share of merely 20.5% of point-of-sale transactions in 2021.3 But as of now, cash is the only form of central bank money that is available to the general public. It is, however, not suitable for payments in digital environments.