Narrow banking is a proposed type of bank called a narrow bank also called a safe bank. Narrow banking would restrict banks to holding liquid and safe government bonds. Loans would be made by the other financial intermediaries. That is, the deposit taking and payment activities would be separated from financial intermediation activities.
Background
Some early thought leaders in narrow/safe banking include:
Satyajit Das from the University of Illinois who published an early on the topic of narrow banking [1]
Kevin James from the Bank of England who presented very early on in this debate [2]
