We examine the portfolio choice of banks in a micro-funded model of runs. To insure riskaverse investors against liquidity risk, competitive banks offer demand deposits. We use global games to link the probability of a bank run to the portfolio choice. Based upon interim information about risky...

We examine the portfolio choice of banks in a micro-funded model of runs. To insure riskaverse investors against liquidity risk, competitive banks offer demand deposits. We use global games to link the probability of a bank run to the portfolio choice. Based upon interim information about risky...

In Elamin (2010a), I found that the CRA can not credibly fully reveal its information about the quality of the projects it rates when the ratings are unverifi able. In the model with unveri fiable ratings an informationally-efficient equilibrium, where the investors are always fully informed...

In Elamin (2013), the credit rating agency (CRA) cannot credibly fully reveal its information about the quality of a rated structured finance project, when ratings are unverifi able. Can the fear of losing its reputation discipline the CRA? In this paper, there is incomplete information about...