Lagoarde-Segot, Thomas; Leoni, Patrick L. - In: Journal of Banking & Finance 37 (2013) 11, pp. 4574-4583
We first develop a theoretical model that shows that the likelihood of a collapse of the banking industry of a developing country increases, as the joint prevalence of large pandemics such as AIDS and malaria increases. We also show that the optimal bank reserves increase as the prevalence...