We provide a rationale for bank money creation in our current monetary system by investigating its merits over a system …) costs from monitoring, aggregate lending to bank-dependent firms is inefficiently low. A monetary system with bank money … creation alleviates this problem, as banks can initiate lending by creating bank deposits without relying on household funding …

lower bank liquidity requirements, with a higher precision of depositors' information, and with a lower relevance of large …

In moral hazard models, bank shareholders have incentives to transfer wealth from the deposit insurer - that is … value, and a risk measure, this paper develops a semi-parametric model for estimating the critical level of bank risk at … despite the difficult financial environment, shareholders' risk-taking incentive was confined primarily to a small fraction of …

bank managers and shareholders becomes less severe. Consequently, banks' capital structure needs to be less concerned with …Ongoing financial innovation and greater information availability increase the tradability of bank assets and reduce … banks' dependence on individual bank managers as private information in the lending process declines. In this paper we argue …

holds true for the protection of the stability of an individual bank as it does for that of a whole national or even … international financial system. The liquidity problems of a bank can certainly have a variety of causes. However, as an examination … of the history of bank insolvencies and financial crises shows, an accelerated withdrawal of bank deposits by unsecured …

turmoil has thrown up issues for discussion. These include: 1. The scale and scope of deposit insurance; 2. Bank insolvency … regimes, also known as prompt corrective action'; 3. Money market operations by Central Banks; 4. Commercial bank liquidity …

In the literature, bank runs take the form of withdrawals of real demand deposits that deplete a fixed reserve of goods … in the banking system. This framework describes the type of bank run that has occurred historically in the United States … framework of nominal demand deposits repayable in inside money, pure liquidity-driven bank runs do not occur. If there were …

, however, the bank can readjust the level of risk after the deposit rate is contracted, market discipline leads to an increase …