Inspired by the extensive criticisms against the textbook fractional reserve theory, this paper revisits the mechanics of money creation process and complements the traditional focus on the reserve requirement by elaborating on the roles of three prudential regulations proposed in the Basel III...

Recent evidences provoke broad rethinking of the role of banks in money creation. The authors argue that apart from the reserve requirement, prudential regulations also play important roles in constraining the money supply. Specifically, they study three Basel III regulations and theoretically...

We introduce the concept of the post-merger integration duration (PMID) which is the time delay that it takes a merged entity to fully capture synergistic gains. Using a dynamic model, we examine the effects of this duration on acquiring firms' financing behavior around mergers. When facing a...