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Amador, Manuel; Bianchi, Javier - National Bureau of Economic Research - 2024

We examine banking regulation in a macroeconomic model of bank runs. We construct a general equilibrium model where banks may default because of fundamental or self-fulfilling runs. With only fundamental defaults, we show that the competitive equilibrium is constrained efficient. However, when...

Persistent link: https://www.econbiz.de/10014528381

Liquidity Risk, Liquidity Creation and Financial Fragility : A Theory of Banking

Diamond, Douglas W. - 1999

Both investors and borrowers are concerned about liquidity. Investors desire liquidity because they are uncertain about … when they will want to eliminate their holding of a financial asset. Borrowers are concerned about liquidity because they … compensation for the illiquidity investors will be subject to. We argue that banks can resolve these liquidity problems that arise …

Persistent link: https://www.econbiz.de/10012471328

Let the Worst One Fail : A Credible Solution to the Too-Big-To-Fail Conundrum

Philippon, Thomas; Wang, Olivier - National Bureau of Economic Research - 2021

We study time-consistent bank resolution mechanisms. When interventions are ex post efficient, a government cannot commit not to inject capital into the banking system. Contrary to common wisdom, we show that the government may still avoid moral hazard and implement the first best allocation by...

Persistent link: https://www.econbiz.de/10012794588

Restoring Confidence in Troubled Financial Institutions After a Financial Crisis

Calomiris, Charles W.; Carlson, Mark - National Bureau of Economic Research - 2022

After an unprecedented number of banks suspended operations during the Panic of 1893, the head regulator of banks chartered by the United States government allowed about 100 banks to reopen after certifying their solvency. We evaluate whether actions by bank owners to change management, contract...

Persistent link: https://www.econbiz.de/10013334444

Who Should Learn What From the Failure and Delayed Bailout of the ODGF?

Kane, Edward J. - 1987

In March 1985, the failure of the Ohio Deposit Guarantee Fund (the ODGF) sent shock waves reverberating through the financial world. This episode is popularly interpreted as evidence of the dangers of both private deposit insurance and continuing financial deregulation. This paper argues that...

Persistent link: https://www.econbiz.de/10012476808

How to Restructure Failed Banking Systems : Lessons from the U.S. in the 1930's and Japan in the 1990's

Calomiris, Charles - 2003

The costs of government assistance to banks depend on the way rescues are managed. The cnetral questions of policy reference do not revolve around whether to bail out banks, but rather around the choice of which banks to rescue and the means for doing so. If a rescue is handled skillfully, the...

Persistent link: https://www.econbiz.de/10012469074

Can Emerging Market Bank Regulators Establish Credible Discipline? The Case of Argentina, 1992-1999

Calomiris, Charles W. - 2000

In the early 1990s, after decades of high inflation and financial repression, Argentina embarked on a course of macroeconomic and bank regulatory reform. Bank regulatory policy promoted privatization, financial liberalization, and free entry, limited safety net support, and established a novel...

Persistent link: https://www.econbiz.de/10012471046

Obstacles to Optimal Policy : The Interplay of Politics and Economics in Shaping Bank Supervision and Regulation Reforms

Kroszner, Randall S. - 2000

This paper provides a positive political economy analysis of the most important revision of the U.S. supervision and regulation system during the last two decades, the 1991 Federal Deposit Insurance Corporation Improvement Act (FDICIA). We analyze the impact of private interest groups as well as...

Persistent link: https://www.econbiz.de/10012471187

Monetary Tightening and U.S. Bank Fragility in 2023 : Mark-to-Market Losses and Uninsured Depositor Runs?

Jiang, Erica Xuewei; Matvos, Gregor; Piskorski, Tomasz; … - National Bureau of Economic Research - 2023

We analyze U.S. banks' asset exposure to a recent rise in the interest rates with implications for financial stability. The U.S. banking system's market value of assets is $2 trillion lower than suggested by their book value of assets accounting for loan portfolios held to maturity....

Persistent link: https://www.econbiz.de/10014247969

Stealing Deposits : Deposit Insurance, Risk-Taking and the Removal of Market Discipline in Early 20th Century Banks

Calomiris, Charles W. - 2016

Deposit insurance reduces liquidity risk but it also can increase insolvency risk by encouraging reckless behavior. A …

Persistent link: https://www.econbiz.de/10012455988

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