THERE is increasing discussion these days of means of promoting more effective competition in banking, derived from a growing realization that our financial system, in terms of its pricing and performance, is not all that it could be. The Commission on Money and Credit, quite orthodox in some of its expressions, revealed dissatisfaction with many of the rigidities in the structure of our private financial system, and proposed a number of reforms.' Interest in reforms was also shown in the controversial "Saxon Report."2 But the strongest agitation for change has come from professional economists, both within academic institutions and within supervisory agencies, whose re-examinations of the banking system have entailed either explicit or implicit proposals for reform.3 There is one great barrier to reform-the idea that, as compared with all other types of business, "banking is different." The truth of this slogan can scarcely be doubted, but its meaning is subject to a number of different interpretations. The orthodox reasoning process seems to be this: In all nonfinancial types of business, the firm can be pressured into satisfactory price and product performance by the threat of losses and, ultimately, failure. If the firm ignores this threat or is unable to avoid its consequences, and misuses scarce resources by producing unwanted products, or overproducing, or using inefficient production techniques, at the extreme it will fail, and the resources will find more socially desirable uses. But banks, it is widely held, cannot be permitted to fail.