Chang, Chuen-Ping; Lin, Jyh-Horng - In: Applied Economics 42 (2010) 24, pp. 3161-3173
Since banks often lend via commitments, their lending and deposit-taking may be two manifestations of one primitive function: the provision of liquidity on demand. We explore this function under a cap-based valuation. We find that (i) the strike price of the cap-based valuation increases the...