ABSTRACT
Hy Minsky's adaptation of the Simons/Fisher proposal may be seen as an attempt to ensure financial stability by separating financial institutions by function, or "master," so that each would serve only one master. The Federal Reserve Bank of Dallas has proposed that the most effective way to simplify supervision of the financial system is to break up the large, complex financial institutions. While any economic or political system could suffer from random, external shocks or political upheaval, it would be impossible, by assumption of their nature, either to explain them or to provide a means of countering them unless they could be foreseen. For Minsky and Joseph Schumpeter, a "narrow banking" system could not be considered a modern "capitalist" system; it would be akin to what John Maynard Keynes defined as a "real wage," as opposed to a "monetary production," economy.
