The literature starting from Diamond (1984), justifying Financial Intermediation (FI) from the viewpoint that it accommodates additionally monitoring service, mis-targets the existence problem of FI, since direct fiances could also accommodate monitoring by hiring a specialist-monitor. This...

The paper presents a general equilibrium model of signaling through bank finance, in which the bigger the bank loan a firm obtains, the lower the book rate of the loan and the higher the firm's quality signaled, which captures well empirical findings. Based on the model, the paper examines how...

This paper first presents a new approach to examine the leverage of financial intermediaries. It is driven by differing risk preferences and captures two features: Debt serves to boost the return of equity, and equity to safe net debt. Then the paper shows, for the first time, that if...

This paper shows that nominal operations move banks' lending rates in steady states by impacting their liquidity constraints, without frictions previously considered, e.g. nominal rigidity and search frictions. Moreover, the effects are heterogeneous. When bank credit is used to make purchase,...

This paper presents a new approach to endogenize interbank credit networks, based on banks' specialty that their liabilities are accepted as a means of payment. This approach takes into account how borrowing on banks' asset side affects depositing on their liability side in general equilibrium....

China's electricity sector faces the challenge of managing cost increases, improving reliability, and reducing its environmental footprint even as operating conditions become more complex due to increasing renewable penetration, growing peak demand, and falling system load factors. Addressing...

This paper presents a model on the leverage of financial intermediaries, where debt are held by risk averse agents and equity by the risk neutral. The paper shows that in an unregulated competitive market, financial intermediaries choose to be leveraged over the social best level. This is...

This paper presents a model on the leverage of financial intermediaries, where debt are held by risk averse agents and equity by the risk neutral. The paper shows that in an unregulated competitive market, financial intermediaries choose to be leveraged over the social best level. This is...