ONLY banks are allowed to hold deposits at the Bank of England. What if that privilege were extended to others? A new speech by Ben Broadbent, deputy governor of the Bank of England, tries to spell out the economics of opening up the bank’s balance-sheet.

Expanding access to the bank's deposit facilities beyond commercial banks could work in a number of ways. Other financial institutions, like insurance companies or pension funds, could be allowed to open accounts. More radical would be to let non-financial firms, or individual depositors, do the same. In extremis, even foreigners could be allowed to park funds at the bank. The deposits might even be interest-bearing, and usable like a normal checking account.

Money of this form would combine the safety of banknotes with the convenience of a bank account. It could even, in theory, replace cash. If it did, central bankers could then use deeply negative interest rates to give the economy a boost. Even without abolishing cash, introducing what Mr Broadbent terms a ‘central bank digital currency’ (CBDC) would have significant effects.

It would pose a challenge to the commercial banks. Deposits at the Bank of England would be guaranteed by the state, even beyond the £75,000 covered by deposit insurance (or the £50,000 that can be placed in NS&I bonds). That could encourage depositors to move funds from commercial banks to the central bank, particularly during times of financial instability. Siemens, a German engineering company with a banking license, withdrew half a billion euros from French banks and parked it at the ECB in 2011.

To offset a deposit drain, commercial banks would have to pay a higher rate of interest, making them less profitable. In the long run that could threaten public support for deposit insurance; if commercial bank deposits became known as high-paying, risky assets, then politicians might balk at insuring them.

The biggest impact would be to change the architecture of the banking system, though. Sucking deposits out of the commercial banks could force them to find funding elsewhere. But if all banks experienced a deposit drain, they would collectively have to turn to the central bank for loans. A central bank flush with retail deposits might find itself being forced to lend them back to the banking system. Instead of turning to the wholesale money markets when short of funds, a commercial bank's first port of call would be to its central bank. Some would call that the nationalisation of the wholesale money market. Slimmed-down banks would also lend less. That could make certain types of borrowing more expensive as banks retrenched.

And a whole range of businesses would become defunct. If foreigners could hold accounts directly at central banks, the whole business of correspondent banking (whereby domestic banks rent their balance-sheets out to foreign ones) would become unnecessary. Central-bank swap lines, set up during the crisis to allow foreign banks to access dollars, could become redundant if foreigners could hold accounts directly at America's central bank.

It may even have international consequences. Brexit fears aside, a deposit at the Bank of England would likely be considered a haven asset. That could lead to capital inflows from overseas during times of panic. Ireland upset other countries when it guaranteed the debts of its banks in 2008. Opening the Bank of England’s books to foreigners could do the same.

The logistics of opening up the Bank of England's books would also be daunting. Running a system of accounts for a few hundred banks is much simpler than running an entire payments system. Mr Broadbent expressed hope that blockchain-based technologies, derived from the technology underlying Bitcoin, would make things easier. Unlike the costly settlement and clearing systems elsewhere in the financial world, the Bank's Real Time Gross Settlement system is already inexpensive to administer, though.

In short, introducing a CBDC would likely prove highly disruptive. For that reason, we are unlikely to see one emerge anytime soon. The Bank of England used to take deposits from its staff. That scheme was closed to new hires a few years back. The old-timers still hanging on at the Bank are unlikely to be joined any time soon.