Automated Banking System

Solution
 
   Since a nation's monetary system should be as secure and reliable as possible, replacing the multitude of banks that exist today with a single automated bank at the national level would resolve many of these problems.

   For example, conservative lending formulas would protect the consolidated system from overextending itself with risky loans. Offering only fixed-rate loans would prevent the risks that are often associated with variable-rate loans that consumers typically overlook.

   An automated banking system will also provide better protection for depositors since their funds will never be risked with unsecured debt. Nor will the automated bank invest such deposits without consent of the owner. Which is not practiced today nor do consumers receive the full benefit of the invested deposits that was made without their consent.

   The automated bank will also place limits on large withdrawal amounts that will further stabilize the system. This alone would have prevented the Silicon Valley Bank failure of 2023 where depositors withdrew $42 billion on a single day that forced the bank to sell investments at a loss.

   An automated banking system will also provide better management of interest rates that will auto-adjust based on the bank's deposit-to-lending ratio. In the past, the prime interest rate was manually adjusted to control inflation which had little to do with the amount of capital in the banking system. Moving forward, a better alternative would be to control inflation by a more effective means than manually adjusting the bank's lending rate (c.f. Inflationary Tax).

   A consolidated banking system also provides greater stability by eliminating the risk of insolvency (e.g., never have to worry that a particular bank will fail since all banks are combined as a single entity). Ensuring reserves remained in cash and lending never overextended also removes the need for the FDIC program since the banking system would be more secure against default.

   Even though the disadvantage of a consolidated bank is that it would eliminate competition for better interest rates, however, there isn't much of a variation among banks today since their rates are based on the prime interest rate. The minor benefit of having slightly improved rates isn't worth the risk of a bank (or multiple banks) fail due to an economic crisis. A consolidated bank at the federal level is also non-profit which will provide efficient rates for all.

   An automated bank will also improve how bankruptcies are handled in that a filing will be more of an extended grace period than the actual forgiveness of debt. This will allow individuals and businesses time to recover from a financial downturn and not overload the system with unpaid debt obligations. In the past, this caused banks to increase their fines and penalties to recover against such losses. Conservative lending formulas will also prevent individuals/businesses from overextending themselves in the first place, which will minimize the total number of bankruptcies as well.

   Overall, a consolidated automated banking system will result in a more reliable, stable, and efficient monetary system for the country. By doing so, we will never have to worry about a bank failing ever again.