Reserve Requirements, the Maturity Structure of Debt, and Bank Runs
AbstractThe paper looks at the relationship between reserve requirements and the choice of the maturity structure of external debt in a general equilibrium setup, by incorporating the role of international lenders. A date- and maturity-specific reserve requirement is a fraction of the debt to be deposited in a non-interest bearing account at the central bank. At maturity, the central bank returns the reserves. There exist some specific combinations of date- and maturity-specific reserve requirements that reduce the vulnerability to bank runs. In such setup, lenders may still want to provide new short-term lending to the bank after a bank run.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 08/108.
Date of creation: 01 Apr 2008
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-21 (All new papers)
- NEP-BAN-2008-06-21 (Banking)
- NEP-CBA-2008-06-21 (Central Banking)
- NEP-MON-2008-06-21 (Monetary Economics)
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