منابع مشابه
Private Liquidity and Banking Regulation
We show that the regulation of bank lending practices is necessary for the optimal provision of private liquidity. In an environment in which bankers cannot commit to repay their creditors, we show that neither an unregulated banking system nor narrow banking can provide the socially e¢ cient amount of liquidity. If the bankers provided such an amount, then they would prefer to default on their...
متن کاملPrivate Money and Banking Regulation ⇤
We show that the regulation of lending practices is desirable for the optimal provision of private money. In an environment in which bankers cannot commit to repay their creditors, neither an unregulated banking system nor a form of narrow banking in which banks hold 100% in reserves can provide the socially efficient amount of money. If bankers provided such an amount, then they would prefer t...
متن کاملOptimal Banking Regulation with Endogenous Liquidity Provision
In a money-search model where deposits are used as means-of-payments, banks have expertise to obtain higher returns from assets with a cost and an economy of scale but are subject to limited commitment and moral hazard. They can pledge a proportion of asset holdings to issue deposits. Optimal regulation trades off efficiency in assetmanagement and liquidity service banks provide. An optimal cha...
متن کاملThe Role of Regulation in Banking: Liquidity Risk Perspective
The liquidity crisis in 2008 sparked interest in the role of regulation that could promote resilience and stability in the banking system. While the Public Interest theory suggests that legal policies could discipline banking activities, the Private Interest theory predicts otherwise, which impairs banking performance. The conflicting theories warrant comprehensive research, especially for Isla...
متن کاملLiquidity, Asset Price and Banking
We consider an economy where people have the needs for liquidity because of the unanticipated consumption opportunity, yet banks may not provide su¢ cient liquidity due to imperfect technology in commitment, enforcement and record-keeping. We show a link between the liquidity generated by bank lending, the value of the asset used as collateral and aggregate economic activity. When the record-ke...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2012
ISSN: 1556-5068
DOI: 10.2139/ssrn.2060406