Research Repository

Banks, Credibility and Macroeconomic Evolution after a Production Shock

Vinogradov, D (2009) Banks, Credibility and Macroeconomic Evolution after a Production Shock. Working Paper. EBS Working Papers, Colchester.

WP2009 -11.pdf

Download (541kB) | Preview


One of the important functions of financial intermediation is intertemporal risk smoothing. This paper studies the effects of a production shock in a closed economy and compares the abilities of market-based and bank-based financial systems in processing the shock. The analysis of the shock propagation indicates that a competitive banking system may collapse in absence of a proper regulation. Paradoxically, it is the credibility of banks that makes bank-based economies fragile. A necessary and sufficient condition for successfull bailout schemes is proposed.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Banks; financial crisis; shock; regulation
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Essex Business School
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 03 Jan 2014 10:44
Last Modified: 06 Jan 2022 13:40

Actions (login required)

View Item View Item