Bank runs and investment decisions revisited
نویسندگان
چکیده
منابع مشابه
Working Paper Series Bank Runs and Investment Decisions Revisited Wp 04-03 Huberto M. Ennis Federal Reserve Bank of Richmond Bank Runs and Investment Decisions Revisited Federal Reserve Bank of Richmond Working
We examine how the possibility of a bank run affects the deposit contract offered and the investment decisions made by a competitive bank. Cooper and Ross (1998) have shown that when the probability of a run is small, the bank will offer a contract that admits a bank-run equilibrium. We show that, in this case, the bank will chose to hold an amount of liquid reserves exactly equal to what withd...
متن کاملEquilibrium Bank Runs Revisited
In a Diamond and Dybvig (1983) environment, Green and Lin (2003) take a mechanism design approach and show that a bank run equilibrium cannot exist. Peck and Shell (2003) generalize their economic environment and show that it can. The bank run, however, does not emerge because of modifications to the economic environment but rather because the mechanism that implements allocations is not an opt...
متن کاملHerding and bank runs
Traditional models of bank runs do not allow for herding e¤ects, because in these models withdrawal decisions are assumed to be made simultaneously. I extend the banking model to allow a depositor to choose his withdrawal time. When he withdraws depends on his consumption type (patient or impatient), his private, noisy signal about the quality of the banks portfolio, and the withdrawal histori...
متن کاملBank Portfolio Restrictions and Equilibrium Bank Runs
and Headnote We put “runs” back in the bank runs literature. A unified bank, one that invests in both liquid and illiquid assets, can easily avoid runs but it still faces a small probability of non-run rationing of depositors. In a separated financial system, the bank only holds relatively liquid assets; it is subject to runs with small probability, but because of its overinvestment in the liqu...
متن کاملBank incentives, contract design and bank runs
We study the Diamond-Dybvig [3] model as developed in Green and Lin [5] and Peck and Shell [7]. We dispense with the notion of a bank as a coalition of depositors. Instead, our bank is a self-interested agent with a technological advantage in recordkeeping. We examine the implications of the resulting agency problem for the design of bank contracts and the possibility of bank-run equilibria. Fo...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Journal of Monetary Economics
سال: 2006
ISSN: 0304-3932
DOI: 10.1016/j.jmoneco.2004.09.006