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The paper analyses the relationship between deposit insurance, debt-holder monitoring, and risk taking. In a stylised banking model we show that deposit insurance may reduce moral hazard, if deposit insurance credibly leaves out non-deposit creditors. Testing the model using EU bank level data...
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for pure exchange, sequential economies, with deffinitely many states of private information, an incomplete financial …. Then, we show how a central bank, by deciding on the money supply, may affect the revelation of information at equilibrium. …
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