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in a centralized reserve system to overcome the risk of financial panic arising from the observed isolation of some …
Persistent link: https://www.econbiz.de/10005514559
Arguably, eliminating suspensions of payments--periods when banks jointly refuse to convert their liabilities into outside money or other assets--was an important impetus for creating the Federal Reserve. Friedman and Schwartz suggest that a suspension in 1930 would have decreased the severity...
Persistent link: https://www.econbiz.de/10005402041
capital requirements as a preferred means to discipline the risk-taking behavior of systemically important banks. One such …
Persistent link: https://www.econbiz.de/10005402047
During the Panic of 1907, New York City trust companies were not members of the New York Clearinghouse whereas trust companies in Chicago were members of the Chicago Clearinghouse. We argue that the apparent isolation of New York City trust companies from the pool of bank reserves controlled by...
Persistent link: https://www.econbiz.de/10005401881
This paper investigates the question of why banks almost always settle payments in cash as opposed to debt. Our model suggests that adverse selection with respect to the quality of bank assets may be the primary motivation underlying this practice. Banks with higher-quality assets prefer not to...
Persistent link: https://www.econbiz.de/10005402016
Persistent link: https://www.econbiz.de/10005721704
This paper reviews the extant empirical studies of financial innovation. Adopting broad criteria, the authors found just two dozen studies, over half of which (fourteen) had been conducted since 2000. Since some financial innovations are examined by more than one study, only fourteen distinct...
Persistent link: https://www.econbiz.de/10005514531
Credit rationing is a common feature of most developing economies. In response to it, the governments of these countries often operate extensive credit programs and lend, either directly or indirectly, to the private sector. We analyze the macroeconomic consequences of a typical government...
Persistent link: https://www.econbiz.de/10005514543
A number of developing countries have adopted deficit-finance regimes involving multiple reserve requirements. One question the previous literature on this phenomenon has not addressed is whether multiple-reserves regimes can improve on regimes involving single-currency-reserve requirements if...
Persistent link: https://www.econbiz.de/10005514585
Persistent link: https://www.econbiz.de/10005401846