The Purple Financial Plan

We, the undersigned, support the following principles governing financial reform and endorse immediate implementation of the Purple Financial Plan, also known as Limited Purpose Banking.

Principles of Financial Reform
1. The goal of a financial system is intermediation, not gambling.
2. The new system should be transparent and provide full disclosure.
3. The new system should never collapse or put the economy at risk.
4. The new system should not require government guarantees.
5. The new system should entail limited regulation.
6. The new system should improve financial intermediation.

Limited Purpose Banking

1. Applies to all financial companies protected by limited liability. This includes incorporated commercial banks, investment banks, insurance companies, hedge funds, and private equity funds.
2. All financial companies protected by limited liability must operate exclusively as mutual fund companies that market mutual funds.
3. Mutual funds are not allowed to borrow and, thus, never fail.
4. Mutual fund companies required to also issue cash mutual funds, which hold only cash.
5. Cash mutual funds are used for the payment system.
6. Cash mutual funds are backed to the buck.
7. Mutual fund companies are not permitted to back money market or other non-cash mutual funds to the buck and can lose value.
8. A single regulator - the Federal Financial Authority (FFA) -- hires private companies that work only for it.
9. Companies working for FFA verify, appraise, rate, custody, and disclose, on the web and in real time, all securities held by mutual funds.
10. Mutual funds buy and sell FFA-processed and disclosed securities at auction. This ensures that issuers of securities, be they households or firms, receive the highest price for their paper (borrow at the lowest rate).