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

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dc.contributor.author Samartín Sáenz, Margarita
dc.date.accessioned 2010-04-15T13:26:42Z
dc.date.available 2010-04-15T13:26:42Z
dc.date.issued 2003-06
dc.identifier.bibliographicCitation The Geneva Papers on Risk and Insurance Theory, junio 2003, Vol 28, No 1, p. 33–57
dc.identifier.issn 0926-4957 (Print)
dc.identifier.issn 1573-6954 (Online)
dc.identifier.uri http://hdl.handle.net/10016/7595
dc.description.abstract This 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.format.mimetype text/plain
dc.format.mimetype application/pdf
dc.language.iso eng
dc.publisher Springer
dc.rights ©Springer
dc.subject.other Bank regulation
dc.subject.other Bank runs
dc.subject.other Deposit contracts
dc.subject.other Optimal risk sharing
dc.subject.other Suspension of convertibility
dc.title On the optimality of bank runs: comment on Allen and Gale
dc.type article
dc.type.review PeerReviewed
dc.description.status Publicado
dc.relation.publisherversion http://dx.doi.org/10.1023/A:1022143831151
dc.subject.eciencia Empresa
dc.identifier.doi 10.1023/A:1022143831151
dc.rights.accessRights openAccess
dc.identifier.publicationfirstpage 33
dc.identifier.publicationissue 1
dc.identifier.publicationlastpage 57
dc.identifier.publicationtitle The Geneva Papers on Risk and Insurance Theory
dc.identifier.publicationvolume 28
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