Liquidity Provision And Banking Crises With Heterogeneous Agents
Incentive compatibility constraints that produce contracts where short-term funds choose not to deposit will prevent banking crises, but at the cost of losing the insurance function of banks. Restricting short-term deposits may not be optimal at all times, since the cost of doing so may be greater than the expected loss in allowing crises to occur with positive probability.
(This abstract was borrowed from another version of this item.)
Volume (Year): 13 (2009)
Issue (Month): S1 (May)
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