A bank panic is an expectation-driven redemption event that results in a self-fulfilling prophecy of losses on demand … deposits. From the standpoint of theory in the tradition of Diamond and Dybvig (1983) and Green and Lin (2003), it is … surprisingly di¢ cult to generate bank panic equilibria if one allows for a plausible degree of contractual flexibility. A common …

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

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 …