Bank runs in the literature take the form of withdrawals of demand deposits payable in real goods, which deplete a …xed reserve of goods in the banking system. That framework describes traditional bank runs based on currency withdrawals as occurred historically in the U.S. and more recently in developing countries. However, in a modern banking system, large withdrawals typically take the form o...

We re-examine the relationship between the degree of deposit market competition and bank risk taking in a model where banks compete in differentiated deposit services. When banks invest their deposits directly, as has already been established in the extant literature, an increased degree of competition, measured either by greater degree of substitutability or by greater number of banks, induces...

This paper recognizes two main factors that cause the capital requirement to affect the weighted average cost of capital and hence the investment behavior ofbanks: underpriced debt resulting from the deposit insurance and information asymmetry between managers and the stock market. For a bank enjoying a low cost of debt (deposits), an increased proportion of equity financing raises the weighted...

the frequent occurrence of currency crises in recent years brought the early warning literature back in the researchers spotlight. in recent years, concept of an early warning system (ews) developed that should be able to identify various costly events, such as currency crises, early enough for policy makers to reduce the costs. this study attempted by using iran's economy quarterly data d...

This paper studies the determinants of bank charter value and its disciplining effect on bank risktaking in the period since the mid-1980s. Due to significant macro developments in the banking industry, including legislation and regulation, consolidation, and technological advances, we find the magnitude, determinants, and the disciplining effect of bank charter value changed quite substantiall...

D eposit insurance was created, at least in part, to prevent unfounded bank failures caused by contagion. The legislation that created the Federal Deposit Insurance Corporation (FDIC) was driven by the widespread bank failures of the Great Depression. In the years immediately before the 1934, when the FDIC began insuring bank deposits, over onethird of all extant banks failed. Many observers ar...