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Journal Article
Means of payment, the unbanked, and EFT '99
Working Paper
Firms as clubs in Walrasian markets with private information : technical appendix
This paper proves the Welfare Theorems and the existence of a competitive equilibrium for the club economies with private information in Prescott and Townsend (2005). The proofs cover lottery economies with a finite number of goods and without free disposal. A mapping based on Negishi (1960) is used.
Working Paper
Firms as clubs in Walrasian markets with private information
Using private information and club theories, this paper develops a theory of firms in general equilibrium. Firms are defined to be assignments of technologies and agents to clubs. In equilibrium, firms form endogenously and multiple types may co-exist. We formulate the general equilibrium problem as both a Pareto program and as a competitive equilibrium. Welfare and existence theorems are provided. In the competitive equilibrium, club memberships are priced and purchased, so the market determines which organizations exist as well as who is a member. Pareto optima and competitive equilibria of ...
Briefing
Did Banking Reforms of the Early 1990s Fail? Lessons from Comparing Two Banking Crises
New Richmond Fed research on community and midsize banks evaluates the Federal Deposit Insurance Corporation Improvement Act (FDICIA) and Basel I by comparing failures in the 1986-92 period to those in 2007-13. Banks greatly increased commercial real estate lending between the two banking crises, but higher capital mitigated this risk. Failure rates in the recent crisis were mainly driven by the severity of the economic shocks. However, higher capital did not help contain FDIC losses, which were much larger in the recent crisis. One possible explanation is limitations in the accounting ...
Journal Article
The Financial Crisis, the Collapse of Bank Entry, and Changes in the Size Distribution of Banks
We document the effects of the recent financial crisis on the size distribution of U.S. commercial banks. There was a 14 percent drop in the number of banks from 2007 to 2013. Proportionally, the largest declines were to the smallest banks, those with less than $100 million in assets. This drop in the number of small banks is not due to bank failures. Despite the severity of the crisis, the rate at which a bank exits the industry, either due to failure or acquisition, is similar to that before the crisis. We show that there has been very little entry into banking since the crisis and that ...
Journal Article
Group lending and financial intermediation: an example
Journal Article
Contingent capital: the trigger problem
In this article, we analyze price triggers in contingent capital bonds. We illustrate the pervasiveness of multiple equilibria and the nonexistence of equilibrium in theoretical models. We summarize evidence of these problems from market experiments and we evaluate possible solutions.
Working Paper
Contingent capital: the trigger problem
Price triggers in contingent capital bonds are analyzed. Pervasiveness of multipleequilibria and nonexistence of equilibrium in theoretical models is illustrated. Evidence of these problems from market experiments is summarized. Possible solutions are evaluated.
Journal Article
Firms, assignments, and earnings