It's very disturbing to me that the possibility of grass roots reform is essentially gone. You need a a two digit million amount of equity, proof of both formal academic and real life experience, you need a large team of trained professionals, easily at least 10 core employees who essentially aren't allowed to know anything other than banking and worst of all, you must keep these employees employed for the duration of the application, which may take a year or two and even if you did all of that, you can still get rejected anyway. Oh, and by the way, you're not allowed to earn money (as a bank) before you get your banking license, meaning that you are burning money faster than any other potential startup.
Now you might think this is fair, after all, banking is a high trust business that requires an extreme amount of caution and care or things will go to shit. Except as I already mentioned: More and more things are moving under the banking license umbrella, but applying to a subset of a banking license doesn't lower costs. The costs are the same no matter what you actually do, which favors massive banks that only have to pay for the license once and use their banking license to the fullest to provide all the services permitted by their license, which ironically increases the systemic risk by letting them become a point of single failure since all the services that ought to be separated are now combined in a single entity to minimize regulatory cost.
Most bailouts are the logical consequence of co-mingling the deposit service with the investment banking services in the same bank. The problem here isn't that losses in investment banking causes loss of deposits. It's that if the bank makes a financial loss in one department, it will also have to shut down the other department as well, because they are under the same company. The opposite is also true. If the payment services run at a loss, the bank will feel compelled to try risky investment banking bets to even the losses out. This type of cross subsidy essentially guarantees that the government will have to bail the bank out.
edit: An the process what you describe as complex etc., is actually good and robust
The place I'd look if I wanted a deeper understanding of how the fed operates would be reading the laws that govern banking.
On technological level? Yes. On the bullshit scam level with sixteen layers of new invented terminology? Most likely not.
And yes, cryptoworld is easier to understand precisely because it's unbelievably primitive once you pull apart hype, scams, and layers of indirection.
Edit: oh, it's also busy re-inventing most of the concepts that the world has had for centuries, and most people understand without needing to read books and whitepapers
