Capital requirements in a model of bank runs: The 2008 run on repo
Capital requirements involve a trade-off between financial intermediation and financial stability. I analyze this trade-off in a macroeconomic model that allows for systemic bank runs, à la Gertler and Kiyotaki (2015). I show that fixed capital requirements make the economy more prone to runs becaus...
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| Format: | Article |
| Language: | English |
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Elsevier
2021-09-01
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| Series: | Latin American Journal of Central Banking |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2666143821000181 |