Showing 1 - 10 of 158
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 …
Persistent link: https://www.econbiz.de/10013007379
markets and in areas that have fewer bank branches per capita. We also find that the portion of LendingClub loans increases in …
Persistent link: https://www.econbiz.de/10011891828
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 …
Persistent link: https://www.econbiz.de/10013007316
This paper develops a dynamic general equilibrium model with an essential role for an illiquid banking system to investigate output dynamics in the event of a banking crisis. In particular, it considers the ex-post efficient policy response to a banking crisis as part of the dynamic equilibrium...
Persistent link: https://www.econbiz.de/10012950505
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 …
Persistent link: https://www.econbiz.de/10013024119
A primary concern in monetary economics is whether a purely private monetary regime is consistent with macroeconomic stability. I show that a competitive regime is inherently unstable due to the properties of endogenously determined limits on private money creation. Precisely, there is a...
Persistent link: https://www.econbiz.de/10013024633
We construct a model of consumer credit with payment frictions, such as spatial separation and unsynchronized trading patterns, to study optimal monetary policy across different interbank market structures. In our framework, intermediaries play an essential role in the functioning of the payment...
Persistent link: https://www.econbiz.de/10012891979
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 …
Persistent link: https://www.econbiz.de/10013106520
The gold standard emerged as the international monetary system by the end of the 19th century. We formally study its properties in a micro-founded model and find that the scarcity of the world gold stock not only results in a suboptimal output of goods that are purchased with money but also...
Persistent link: https://www.econbiz.de/10014239747
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 …
Persistent link: https://www.econbiz.de/10013024632