The goal of this paper is to provide a framework to analyze the effectiveness of bank coalition formation in response … the kind of insurance mechanism provided by a specific type of bank coalition allows society to completely prevent any … shock that is not too big. If the shock is relatively large, then a private bank coalition will be unable to completely …

markets and in areas that have fewer bank branches per capita. We also find that the portion of LendingClub loans increases in …

reserve banking, such as the risk of insolvency for each bank. The goal of this paper is to show that a specific form of … private bank coalition (a joint-liability arrangement) allows the members of the banking system to engage in fractional … reserve banking in such a way that the solvency of each member bank is completely guaranteed. Under this arrangement, I show …

the risk of in-solvency for each bank and the associated losses to bank liability holders. I show that a specific banking … the safety of bank liabilities as a store of value and maximizes the rate of return paid to bank liability holders …

We show that the regulation of bank lending practices is necessary for the optimal provision of private liquidity. In … sector's assets (e.g., by limiting competition in bank lending) will mitigate the commitment problem. If the value of the … bank charter is made sufficiently large, then it is possible to implement an efficient allocation. Thus, the creation of a …

required to induce the full convertibility of bank liabilities. Under perfect competition, a positive franchise value can be … obtained only if the return on bank liabilities is sufficiently low, which imposes a cost on those who hold these liabilities … high return on bank liabilities. Finally, we argue that the regulation of the banking system is required to obtain …