We should disintermediate the banks entirely, and let them morph into pure service providers who need therefore put no capital at risk.

ie everyone receives credits issued direct from Central Banks (ie we all bank with the central bank direct) and "Risk-managers-and-administrators-formerly-known-as banks" assess "Guarantee Limits", operate the system, manage defaults etc etc.

Users of the guarantee make a payment for system use, and also a provision against default, into a "Pool".

I see that as an interim measure to ensure the necessary credit for the productive economy.

Central Banks may then in turn be disintermediated so that Treasuries (operating at local level as would the risk managers) issue credits direct, and the Central Bank becomes a monetary authority - as in Hong Kong, which has never had a Central Bank.

To avoid asset bubbles, I would replace secured credit with "Unitisation" of the relevant assets, but that can wait.