This paper analyzes a simple mobility-based model of mortgage lending and uses the results to illuminate the issue of mortgage points. The model predicts the points/interest-rate trade-off observed in the market and it also predicts that mobile borrowers choose low-points/high- rate contracts...

The moral hazard problem associated with deposit insurance generates the potential for excessive risk taking on the part of bank owners. The banking literature identifies franchise value -- a firm's profit-generating potential -- as one force mitigating that risk taking. In the presence of...

We empirically examine the hypothesis that access to core deposits permits a bank to make contractual agreements with borrowers, which are infeasible if the bank must pay market rates for its funds. Access to core deposits insulates a bank's costs of funds from exogenous shocks. In turn, the...

This paper provides evidence that financial markets can directly affect economic growth by studying the relaxation of bank branch restrictions in the U.S. We find that the rates of real, per-capita growth in income and output increase significantly following intrastate branch reform. We also...

This paper provides evidence that financial markets can directly affect economic growth by studying the relaxation of bank branch restrictions in the U.S. We find that the rates of real, per-capita growth in income and output increase significantly following intrastate branch reform. We also...

The aim of this paper is to contribute to the debate on the redesigning of financial systems in Central and Eastern European and developing countries by focusing attention on specific financial institutions appropriate to easing the transition and fostering the creation of markets. The paper...

We present evidence on the objective function of bank management--that is, are they risk neutral and maximize expected profits, or are they risk averse and trade off profit for risk reduction? We extend the model of Hughes and Mester (1993) to allow a bank's choice of its financial capital level...

This paper reconsiders the literature on tax options by examining the ability to defer net capital gains realizations within an equity portfolio whose constituents change over time. Specifically, this paper examines the feasibility of managing open-end and closed-end Standard and Poor's 500...

This paper develops a conceptual framework for analyzing the global financial system. The framework has two major objectives: to address differences in institutional structure across borders and to explain changes in these institutional structures over time. Applicability of the framework ranges...

This paper explores the effect of banking market structure on the market structure of industrial sectors. It asks whether concentration in the banking market promotes the formation of industries constituted by a few, large firms, or rather, whether it facilitates the continuous entry of new...