sensitivity of deposit flows to bank performance. The fragility is stronger when the aggregate conditions in the banking system …

traditional partnership replaced by public companies. The organizational change has increased the competition for managerial … talent, which may have weakened the commitment between investors and managers. We show how increased competition and the …

their investors. We show the bank has to have a fragile capital structure, subject to bank runs, in order to perform these … functions. Far from being an aberration to be regulated away, the funding of illiquid loans by a bank with volatile demand … such as narrow banking and bank capital requirements …

-funded capital injections. However, on closer inspection the composition of bank capital shifted radically from one based on common …

hedge to fund drawn credit lines and other commitments. We shed new light on this issue by studying the behavior of bank …

role of deposits. Moreover, competition forces banks to promise depositors more, increasing intervention and making the … system worse off. By contrast, constrained central bank intervention to lower rates maintains private discipline, while …

inforamtion framework shows why the banking sector is so important to the economy, and provides a rationale for bank regulation …

We study how heterogeneity in banks’ asset holdings affects fragility. In the model, banks face a risk of bank runs and … sell their assets at the same time. When banks are homogeneous, their selling behaviors are synchronized, and bank runs are …