AbstractThe banking systems of some countries export intermediation services to the rest of the world, while many other countries are net exporters of deposits to banks abroad and net importers of loans from banks abroad. Banking center countries typically have lower inflation, deeper financial ncial systems, earn less gov- ernment revenue from seigniorage, and have lower reserve money relative to bank assets than nonbanking-center countries. This paper develops a stylized model of regulated bank intermediation to examine the role of national monetary policy in determining the international competitiveness of a national banking system. Monetary policy takes the form of controlling the supply of reserve money and imposing restrictions on banks that generate a demand for reserve money (re- serve requirements). The international competitiveness of a banking system is enhanced by having a monetary authority who places greater weight on the in- terests of existing creditors relative to debtors in its constituency, and who has less need to raise revenue from seigniorage. With complete integration of deposit and loan markets the location of intermediation can be indeterminate. Countries that receive more deposits can generate a given amount of seigniorage with less inflation. Monetary authorities in countries that experience deposit outflows may be tempted to impose capital controls in order to maintain their seigniorage base. The analysis suggests why integration of financial markets may be undesirable or infeasible without greater integration of monetary policies.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Boston University, Institute for Economic Development in its series Boston University - Institute for Economic Development with number 42.
Date of creation: Apr 1994
Date of revision:
Other versions of this item:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
- Douglas W. Diamond & Philip H. Dybvig, 2000.
"Bank runs, deposit insurance, and liquidity,"
Federal Reserve Bank of Minneapolis, issue Win, pages 14-23.
- Aliber, Robert Z, 1984. "International Banking: A Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(4), pages 661-78, November.
- Fischer, Stanley, 1982. "Seigniorage and the Case for a National Money," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 295-313, April.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Renee D. Nieberding, 2004. "Optimal Government Finance And Democracy In Developing Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 29(2), pages 131-148, December.
- Sul, Wonsik, 2000. "On the performance of the foreign subsidiaries of Korean banks: are securities investments really profitable?," Journal of Asian Economics, Elsevier, vol. 11(2), pages 207-222.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.