In recent years, there has been increasing interest in understanding the determinants of income inequality across countries. There have also been concerns about the degree of concentration in the banking system on economic activity. Yet, there has not been any work which focuses on the level of...

In recent years, there has been increasing interest in understanding the determinants of income inequality across countries. There have also been concerns about the degree of concentration in the banking system on economic activity. Yet, there has not been any work which focuses on the level of...

How do liquidity creation and financial fragility depend on the dual effects of increasing returns to scale and banking competition? We study this question in a model of financial intermediation with limited commitment. In the absence of scale economies, the degree of fragility is independent of...