As the subprime crisis of 2007 sparked broader financial problems, two facts about the banking sector became apparent. First, that banking institutions had grown much faster than the stock of assets in the economy over the preceding decades. Second, that banks had grown to be so interconnected that the failure of one was thought to spark off a cascade of bank collapses. Taken together these apparent facts gave rise to the general perception that the banks dominating the financial sector had become too big to fail. Since 2007 and mostly as a result of various quantitative easing a new feature of the banking sector has become apparent – a large amount of reserves held in excess of the regulatory requirements. In this paper we explain first how the banking sector was able to grow at a faster rate than the broader economy for a sustained period and also why banks grew interconnected to a degree not seen in other industries. Second, we provide a solution to these peculiarities by use of the existing excess reserve balances, and in this way demonstrate that various piecemeal regulations in place can be replaced by a simpler standard. The result is that banking operations would be standar...