@SteveRoth So, finally, Japan.

The risk, from both depositors’ perspective and the state’s is higher inflation. That’s the failure mode of states-as-banks.

But, for Japan, that’s a bit of a briar-patch risk, as they spent decades grappling with deflationary currents. Their loose fiscal is largely a result of this experience, and is presumably to some degree at least reversible, creating a second firewall against unwanted high inflation. 11/