Publication: A model for financial intermediation and public intervention
Loading...
Identifiers
Publication date
1997-04
Defense date
Authors
Advisors
Tutors
Journal Title
Journal ISSN
Volume Title
Publisher
Impact
Export
Abstract
Based on Chari and Jagannathan (1988), this paper models information-induced and "pure-panic"
runs in an environment of risk-averse agents. In this framework, deposits are needed to provide
insurance against investors' unexpected demand for liquidity and therefore, a role for a financial
intermediary is justified. A welfare analysis of two traditional devices to prevent runs (namely,
suspension of convertibility versus deposit insurance), is presented.
Description
Keywords
Banking, Deposit contracts, Deposit insurance, Suspension of convertibility