The Importance of Having a Central Bank

Congress in 1912, 1913 was very reluctant to agree to have the Federal Reserve established. The argument is that even the strongest bank will have a problem if all the depositors suddenly want their money. That's just banking. It's the model. But you can solve this through a number of things. And one solution is to have a central bank which then provides unlimited liquidity to depositors. Then you get other deposits from other players or wholesale or the central bank and things return back to normal.