We model the impact of bank mergers on loan competition, banks' reserve holdings and aggregate liquidity. Banks compete … in liquidity risk and expected liquidity needs for each bank and for the banking system. Large mergers tend to increase … expected aggregate liquidity needs, and thus the liquidity provision by the central bank. Comparative statics suggest that a …

costs. In this paper I show that if borrowers perceive the public bank as supporting economic development, private banks may … disadvantage. The public bank's competitive advantage may be offset,independently of what its true objective function is. Even …