This paper proposes that bank runs are unique equilibrium outcomes instead of self-fulfilling prophecies. By assuming that depositors make their withdrawal decisions sequentially, the model provides an equilibrium-selection mechanism in the economy. A bank run would occur if and only if depositors perceive a low return on bank assets. Furthermore, a panic situation arises only when the market i...

Does the lack of peers contribute to the observed gender gap in entrepreneurial success? A random sample of customers of India’s largest women’s bank was offered two days of business counseling, and a random subsample was invited to attend with a friend. The intervention significantly increased participants’ business activity, but only if they were trained with a friend. Those trained with a fr...

Repayment versus Investment Conditions and Exclusivity in Lending Contracts Lenders condition future loans on some index of past performance. Typically, banks condition future loans on repayments of earlier obligations whilst international organizations (official lenders) condition future loans on the implementation of some policy action (‘investment’). We build an agency model that accounts fo...

This study estimates the multi-component efficiency of banks under financial holding companies, including profitability and marketability efficiencies, by utilizing a RAM (Range-adjusted measure) variation model. The analysis process uses the three-dimensional BCG (Boston Consulting Group) matrix created by this study. We find that although semi-publicly-owned banks under financial holding comp...

In the recent recession and current economic recovery, policymakers have supported housing prices, expecting that improvement in the balance sheets of banks and consumers will spur economic activity. Considering the period of 1988 through 2006, we document that banks which are active in strong housing markets increase mortgage lending and decrease commercial lending. Firms that borrow from thes...

We analyze the role of intermediaries on electronic markets using detailed data of more than 14,000 originated loans on an electronic P2P (person-to-person) lending platform. On such an electronic credit market lenders bid for supplying a private loan. Screening of potential borrowers and the monitoring of loan repayment can be delegated to designated group leaders. We find that these participa...

This paper explores the causes and consequences of cross-country variation in mortgage market structure. It draws on insights from several …elds: urban economics, asset pricing, behavioral …nance, …nancial intermediation, and macroeconomics. It discusses lessons from the credit boom, the challenges of mortgage modi…cation in the aftermath of the boom, consumer …nancial protection, and alternati...

This paper examines the evolution of market structure in emerging markets during the 1990’s. While a significant process of bank consolidation has been taking place in these countries, reflected in a sharp decline in the number of banks, this process has not systematically been associated with increased concentration as measured by standard indices. Moreover, econometric estimates based on the ...

The paper studies an incentive contract in a monopolistic and duopolistic credit market where borrowers are different in risk. One lender is in an advantaged position with respect to the other due to past relations with the borrowers. The features of the equilibrium contract are investigated. It is shown that the equilibrium contract drastically changes between the monopolistic and the duopolis...

This paper identifies the effect of financing constraints on firms’ labor demand. We exploit exogenous funding shocks to German savings banks during the US mortgage crisis that are unrelated to local conditions. We find that firms with credit relationships with affected banks experienced a significant decline in employment and in labor compensation relative to firms whose credit relationships w...