"Banks have a special position in the financial system. Their exclusive link to the central bank puts them at the top of the financial system and enables banks to offer liquidity to the wider economy. They also provide loans and payment services to firms and households. This multifaceted nature...

Recommended readings (Machine generated): 1. Michael A. Klein (1971), 'A Theory of the Banking Firm', Journal of Money, Credit and Banking, 3 (2) (Part 9), May, 205-18 -- 2. Douglas W. Diamond and Philip H. Dybvig (1983), 'Bank Runs, Deposit Insurance and Liquidity', Journal of Political...

This review deals with several microscopic models of financial markets which have been studied by economists and physicists over the last decade: Kim- Markowitz, Levy-Levy-Solomon, Cont-Bouchaud, Solomon-Weisbuch, Lux-Marchesi, Donangelo-Sneppen and Solomon-Levy-Huang. After an overview of...