This paper analyzes banking crises using a quantitative model with equilibrium default for both firms and banks. The main results are: 1) small open economies have larger banking crises than closed or large economies. Constant international rates do not mitigate interbank spreads and amplify...

In Contemporary Financial Intermediation, Third Edition, Greenbaum, Thakor and Boot offer a distinctive approach to financial markets and institutions, presenting an integrated portrait that puts information at the core. Instead of simply naming and describing markets, regulations, and...

In this paper, I examine whether Hyman P. Minsky adopted an endogenous money approach in his early work — at the time that he was first developing his financial instability approach. In an earlier piece (Wray 1992), I closely examined Minsky's published writings to support the argument that,...

I analyze the risks in the banking systems in East Asia using the standard supervisory framework, which assesses capital adequacy, asset quality, management, earnings, and liquidity (CAMEL), I find that banking systems in the region are sound, but that the short-term outlook is negative. Second,...

We analyze how a wealth shift to emerging countries may lead to instability in developed countries. Investors exposed to expropriation risk are willing to pay a safety premium to invest in countries with good property rights. Domestic intermediaries compete for such cheap funding by carving out...

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset volatility by an order of magnitude relative to that of...