Since the financial crisis there exists a widespread discussion about the role of banking in a monetary economy. We contribute to this discussion by presenting a basic model of the banking sector which models banks as originators of credit without owning pre-collected savings or reserves...

Changes in a central bank's monetary policy are proven to affect credit growth for corporations and households. However, the exact transmission mechanism is still widely debated. This paper adds to the studies on the bank lending channel and focuses on cross-sectional differences among banks and...

Bank credit, as a means of payment, circulates in a circuit: It is first originated from the banking system, then used for trading, and eventually deposited back to the banking system. This circulation creates an interbank network that has been little studied. I characterize how this interbank...

This paper proposes a stochastic model of a bipartite credit network between banks and the non-bank corporate sector that encapsulates basic stylized facts found in comprehensive data sets for bank-firm loans for a number of countries. When performing computational experiments with this model,...

Some stylized facts about transactions among banks are not easily reconciled with coinsurance of short-term liquidity risks. In our model, interbank markets play a different role. We argue that lending to another bank can reduce a bank's overall portfolio risk through diversification. If...

Objective: The objective of this article is to investigate the behaviours of the Ukrainian lending rate, deposit rate, and intermediation premium from January 2000 to January 2019, or the post-1999 era. Research Design & Methods: The Perron’s (1997) endogenous unit root test, the Threshold...