Explain with simple examples how banks provide the following services to society:

Transform risky assets into safe liabilities (e.g., safe deposits)

Transform illiquid assets into liquid liabilities (e.g., liquid deposits)

Transform long term assets into short term liabilities

Provide payment services

Since the GFC many suggestions have been made to reduce the risk in the banking sector. One idea is so-called "narrow banking". Already, one such bank has been created, TNB USA Inc. (The Narrow Bank) and its business model would have been to match all deposits immediately by 100% reserves at the FED (similar to ESF at RBA). The FED rejected this idea. Evaluate how useful TNB services are for society referring to the banking services from a).