Gaytan, Alejandro; Rancière, Romain - Department of Economics and Business, Universitat … - 2004
financial intermediaries implement liquidity risk sharing among depositors. We show that at early stages of economic development … economy has crossed certain wealth threshold, the liquidity role of banks becomes unambiguously growth enhancing. As wealth … increases, banks offer improving liquidity insurance, and higher growth; however, for high levels of wealth, growth generated by …