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New security designs, improvements in computer telecommunications technology and advances in the theory of finance have led to revolutionary changes in the structure of financial markets and institutions. This paper provides a functional perspective on the dynamics of institutional change and...
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The majority of bank liabilities are deposits typically not withdrawn for extended periods. We propose a dynamic model … effects on bank dynamics. Interest rate cuts produce delayed increases in bank risk which are stronger in low rate regimes …. Deposit insurance can exacerbate the deposit dilution and amplify the increase in bank risk …
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