We develop a theory of bank liquidity (cash reserve) requirements. Because cash is both observable and riskless … liquidity assistance. Our theory has several implications for the design of liquidity regulation that are absent from existing …, greater cash holdings improve bank incentives to manage risk in the remaining, non-cash portfolio of risky assets. In a model …

discounting of bank notes in trade. Privately enforced regu- lations prevented free riding in the form of excessive risk taking … New York City banks indicates that the stock market perceived that bank lending produced less risk for bank debt holders …

discounting of bank notes in trade. Privately enforced regu- lations prevented free riding in the form of excessive risk taking … New York City banks indicates that the stock market perceived that bank lending produced less risk for bank debt holders …

If stable and efficient banks are such a good idea, why are they so rare? -- The game of bank bargains -- Tools of … colonial times to 1990 -- The new U.S. bank bargain : megabanks, urban activists, and the erosion of mortgage standards …