An endogenous growth model with financial intermediation demonstrates how deposit insurance and prudential regulatory forbearance lead to banking crises and growth declines. The model assumptions are based on features of the Japanese financial system and regulation. The model demonstrates how...

Banks play a fundamental role in the growth of the economy of the country. A bank is an institution engaged in accepting deposits and granting loans. One of the important roles of the banking industry is to channelize the deposit money for the purpose of the lending activity. A pattern of...