Advanced Search
MyIDEAS: Login to save this article or follow this journal

Banking as the Provision of Liquidity

Contents:

Author Info

  • Freeman, Scott

Abstract

This article represents a model economy in which demand deposits represent the optimal financial intermediation. Because these demand deposits are backed in part by an illiquid asset, the in termediary ("bank") is subject to panics in which each agent ration ally decides to withdraw his deposits, making all worse off. Banks ca n prevent panics only through a distortion of the optimal contract. T he government can prevent panics without this distortion by guarantee ing the return from deposits. The moral hazard introduced by this dep osit insurance induces the government to regulate the intermediary's portfolio and returns. Copyright 1988 by the University of Chicago.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.jstor.org/fcgi-bin/jstor/listjournal.fcg/00219398/.61-.67
File Function: full text
Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Business.

Volume (Year): 61 (1988)
Issue (Month): 1 (January)
Pages: 45-64

as in new window
Handle: RePEc:ucp:jnlbus:v:61:y:1988:i:1:p:45-64

Contact details of provider:
Web page: http://www.journals.uchicago.edu/JB/

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ucp:jnlbus:v:61:y:1988:i:1:p:45-64. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.