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dc.contributor.authorSCHROTH, Josef
dc.date.accessioned2012-07-18T10:17:41Z
dc.date.available2012-07-18T10:17:41Z
dc.date.issued2012
dc.identifier.issn1830-7728
dc.identifier.urihttp://hdl.handle.net/1814/22796
dc.description.abstractThis paper studies a dynamic version of the Holmstrom-Tirole model of intermediated finance. I show that competitive equilibria are not constrained efficient when the economy experiences a financial crises. A pecuniary externality entails that bank back-loading of dividend payments may weaken bank incentives. Banks’ strong desire to accumulate capital over time aggravates the scarcity of informed capital during the financial crisis. I show that a constrained social planner finds it beneficial to introduce a permanent wedge between the deposit rate and the economy’s marginal rate of transformation. The wedge improves borrowers’ access to finance during a financial crisis by strengthening banks’ incentives to provide intermediation services. I propose a simple implementation of the constrained-efficient allocation that limits bank size.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.relation.ispartofseriesEUI MWPen
dc.relation.ispartofseries2012/14en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectLimited commitmenten
dc.subjectconstrained efficiencyen
dc.subjectfinancial regulationen
dc.subjectfinancial crisesen
dc.subjectE20en
dc.subjectE51en
dc.subjectG10en
dc.subjectG18en
dc.titleFinancial Crisis Resolutionen
dc.typeWorking Paperen
dc.neeo.contributorSCHROTH|Josef|aut|
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