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On the optimality of bank runs: comment on Allen and Gale

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorSamartín, Margarita
dc.date.accessioned2010-04-15T13:26:42Z
dc.date.available2010-04-15T13:26:42Z
dc.date.issued2003-06
dc.description.abstractThis paper presents a model consistent with the business cycle view of the origins of banking panics. As in Allen and Gale (1998), bank runs arise endogenously as a consequence of the standard deposit contract in a world with aggregate uncertainty about asset returns. The purpose of the paper is to show that Allen and Gale's result about the optimality of bank runs depends on individuals's preferences. In a more general framework, considered in the present work, a laissez-faire policy can never be optimal, and therefore, regulation is always needed in order to achieve the first best. This result supports the traditional view that bank runs are costly and should be prevented with regulation.
dc.description.statusPublicado
dc.format.mimetypetext/plain
dc.format.mimetypeapplication/pdf
dc.identifier.bibliographicCitationThe Geneva Papers on Risk and Insurance Theory, junio 2003, Vol 28, No 1, p. 33–57
dc.identifier.doi10.1023/A:1022143831151
dc.identifier.issn0926-4957 (Print)
dc.identifier.issn1573-6954 (Online)
dc.identifier.publicationfirstpage33
dc.identifier.publicationissue1
dc.identifier.publicationlastpage57
dc.identifier.publicationtitleThe Geneva Papers on Risk and Insurance Theory
dc.identifier.publicationvolume28
dc.identifier.urihttps://hdl.handle.net/10016/7595
dc.language.isoeng
dc.publisherSpringer
dc.relation.publisherversionhttp://dx.doi.org/10.1023/A:1022143831151
dc.rights©Springer
dc.rights.accessRightsopen access
dc.subject.ecienciaEmpresa
dc.subject.otherBank regulation
dc.subject.otherBank runs
dc.subject.otherDeposit contracts
dc.subject.otherOptimal risk sharing
dc.subject.otherSuspension of convertibility
dc.titleOn the optimality of bank runs: comment on Allen and Gale
dc.typeresearch article*
dc.type.reviewPeerReviewed
dspace.entity.typePublication
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