information production role of banks. Because the amount of available information increases with development, our model predicts … introduced by the presence of moral hazard naturally depends on the information structure in the economy; it is cheaper to induce … correct incentives in a society which possesses better ex-post information. The degree of ex-post information depends on the …

This paper studies the impact of competition on the determination of interest rates, and on banks’ risk taking … behaviour, under different assumptions about deposit insurance and the dissemination of financial information. We find that … lower entry costs foster competition in deposit rates and reduce banks’ incentives to limit risk exposure. While higher …

place toxic assets in one or more bad banks has gained steam in recent weeks. The following paper presents a plan how … governments can efficiently relieve ailing banks from toxic assets by transferring these assets into a publicly sponsored work … government. The risk to taxpayers from this investment would be acceptable, however, once the banks are freed from toxic assets …

Many economists argue that the primary economic function of banks is to provide cheap credit, and to facilitate this … function, they advocate the strict protection and enforcement of creditor rights. But banks can serve another important …

In the course of ordinary business, commercial banks frequently encounter entrepreneurs seeking loans for the purpose … relationship between banks and possible optimistic entrepreneurs. We examine this capital market from the stand-point of economic … obtain good rates on future loans. But contrary to the conventional wisdom, competition may lead banks to be insufficiently …