exhibits both adverse selection and moral hazard. Depositors do not fully account for the social benefits accruing from bank …

efficient’. While Central Bank policy may have shifted radically now that stability is an explicit objective of policy, the same …

also contributed, through the deeply subsidised bank funding it provided through the 3-year LTROs, half of a mechanism to …

This paper studies the strategic interaction between a bank whose deposits are randomly withdrawn, and a lender of last … resort (LLR) that bases its decision on supervisory information on the quality of the bank’s assets. The bank is subject to a …. Moreover, when the LLR does not charge penalty rates, the bank chooses the same level of risk and a smaller liquidity buffer …

exogenous factors beyond the control of bank managers, however, information disclosure may increase banking sector fragility, as …

banks. When bank default risk becomes significant, retail deposit insurance creates an asymmetry between banks that operate …

We provide a theory of the determination of exchange rates based on capital flows in imperfect financial markets … theory of exchange rate determination in imperfect financial markets not only rationalizes the empirical disconnect between …