framework in which fractional reserve banks emerge in equilibrium, where bank assets are funded with liabilities made demandable … in government money, where the terms of bank deposit contracts are affected by the liquidity insurance available in … financial markets, where banks are subject to runs, and where a central bank has a meaningful role to play, both in terms of …

This paper examines a much overlooked link between credit markets and formalization: since access to bank credit … bank credit is more widely available at lower cost. The relevance of this credit channel is gauged using the Rajan …

(disciplinary effect). By channeling bank capital it reduces banks' agency costs from lending directly to borrowers, limiting banks …