With extensive country and firm-level data sets, this paper first documents that the financial sectors of most Sub-Saharan African countries remain significantly underdeveloped by the standards of other developing countries. The paper also finds that population density appears to be considerably...

Using household surveys and bank penetration data at the district-level in 2006 and 2009, this paper examines the impact of Equity Bank-a leading private commercial bank focusing on microfinance-on access to banking in Kenya. Unlike other commercial banks in Kenya, Equity Bank pursues distinct...

This paper investigates the African financial development and financial inclusion gaps relative to other peer developing countries. The paper uses a set of variables related to financial development and inclusion. It first estimates the gaps between African countries and other developing...

Market discipline for financial institutions can be imposed not only from the liability side, as has often been stressed in the literature on the use of subordinated debt, but also from the asset side. This will be particularly true if good lending opportunities are in short supply, so that...

Some have argued that recent increases in credit risk transfer are desirable because they improve the diversification of risk. Others have suggested that they may be undesirable if they increase the risk of financial crises. Using a model with banking and insurance sectors, we show that credit...

When liquidity plays an important role as in times of financial crisis, asset prices in some markets may reflect the amount of liquidity available in the market rather than the future earning power of the asset. Mark-to-market accounting is not a desirable way to assess the solvency of a...

We consider the advantages and disadvantages of stakeholder-oriented firms that are concerned with employees and suppliers as well as shareholders compared to shareholderoriented firms. Societies with stakeholder-oriented firms have higher prices, lower output, and can have greater firm value...

In many countries, the legal system or social norms ensure that firms are stakeholder oriented. We analyze the advantages and disadvantages of stakeholder-oriented firms that are concerned with employees and suppliers compared to shareholder-oriented firms in a model of imperfect competition....

Banks are intrinsically fragile because of their role as liquidity providers. This results in under-provision of liquidity. We analyze the effect of government guarantees on the interconnection between banks' liquidity creation and likelihood of runs in a model of global games, where banks.and...