| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 966596 | Journal of Monetary Economics | 2010 | 8 Pages |
Abstract
Restrictions placed on bank portfolios are analyzed in a banking model designed to capture the role of checking accounts in facilitating transactions. Forcing banks to hold only liquid assets creates the incentive for liquidity-based runs. Even when a run does not occur, welfare is reduced as a result of overinvestment in the liquid asset.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
James Peck, Karl Shell,