Your going to be doing yourself a big favor by reading Mosler's book. If you want to propose improvements to banking then I would think the first step is to correctly understand how banking works now.
Books are one thing, but I used to work in a bank. This is how it operated in the United Kingdom. The central bank or other bank would offer a low interest loan which would be made available to the bank, the bank would then receive the money at this low price of borrowing to then lend out again at a higher price. Meaning the process of extending the bank's lending capability was led by the price of borrowing falling which made it possible to pass on the debt at a higher interest price to make a profit.
When the base rate of interest fell it was possible to expand excess reserves to lend out further loans at a higher price than the price of the borrowed funds. The bank had targets on loan agreements to make sure the money was lent out. An example was the extension of the zero percent balance transfer, which charged a three percent transfer fee. The bank would make a three percent return on the transfer of funds from other credit cards, which would make them a two and a half percent profit with a half percent central bank loan.
There were many other loans like this, but this is the one I remember dealing with. The bank was very strict about hitting its targets on loan agreements and balance transfers. To the point it annoyed people who were being pressured in to getting loans. However the balance transfers did offer people who already had debt inexpensive loans. By the very nature of the bank getting the low interest loans and how they made their profit from the difference between the price of borrowing and the price of lending out again meant they borrowed first.
The mechanism of selling on this cheap borrowing was only made possible by reduced price loans from the central bank or other banks. When the cheap loans became available the bank would borrow the money straight away and then sell it on quickly. The mechanism you stated of adjusting reserves after the loan had been made would not necessarily provide this mechanism of selling on cheap debt and profiting from the difference. It would also not fit within the central banks macroeconomic targets.
The process of borrowing from the central bank was very much led by the profit made by the difference between the cost of borrowing and the return from lending it out again. The banks would borrow the funds when the interest rate was low and only borrow at a reduced capacity when it was higher. This fit within the central banks macroeconomic strategy and helped to control the rate of lending. Passing on a higher interest rate when the central bank rate rose was not always an option because the higher interest rate deterred borrowers.
The ability to sell the debt to customers was the other aspect in the process of loan agreements. If the balance transfer rate was zero percent it was easy customers would be queuing up to get the money. If the bank wanted more money on top of the three percent transfer fee it would put the interest rate on the balance transferred account up but it was harder to sell it on. If the bank had the low interest loans in its excess reserves it could guarantee it could sell the debt on at cheap prices and sustain demand.
By the nature of how the bank operated in its lending process it was essential to get the money from the central bank at the desirable price it offered. This guaranteed the ability for the bank to make a profit and to be able to receive the demand it wanted from its customers. I am not sure that the process you described in America of falling below the required reserve to then make an adjustment through the reserve facility would work. Would this process enable the bank to make a profit and to get the demand it wants?
If you can see the point that I am making. The bank was making money specifically from its ability to borrow money from the central bank at a low price in advance of the loan being made to offer the price it needed to make money and get the demand it wanted. This process of holding an excess reserve, even if it was only for a short period enabled the bank to follow a profit making and price setting process that generated a guaranteed level of profit and guaranteed level of demand for the products it was selling.
I am not sure if the reserve adjustment facility offers the same ability as holding an excess reserve, even for a short time, does to enable the bank to profiteer and set the price for lending it needs to get the demand it wants for its products. This process enables banks to make money effectively and provide more competitive prices for lending, it was seen as being efficient. The process you have described may not offer the same flexibility for banks to make a profit and set the prices it needs. Can the reserve adjustment facility offer this advantage?
