Bank runs, bank competition and opacity / by Toni Ahnert and David Martinez-Miera. : FB3-5/2021-30E-PDF

"We model the opacity and deposit rate choices of banks that imperfectly compete for uninsured deposits, are subject to runs, and face a threat of entry. We show how shocks that increase bank competition or bank transparency increase deposit rates, costly withdrawals, and thus bank fragility. Therefore, perfect competition is not socially optimal. We also propose a theory of bank opacity. The cost of opacity is more withdrawals from a solvent bank, lowering bank profits. The benefit of opacity is to deter the entry of a competitor, increasing future bank profits. The excessive opacity of incumbent banks rationalizes transparency regulation"--Abstract, page iii.

Lien permanent pour cette publication :
publications.gc.ca/pub?id=9.902917&sl=1

• Format MARC XML
• Format MARC HTML

Demander des formats alternatifs