This book examines banking crises from the perspective of liquidity, offering a theoretical analysis that also sets the recent global financial crisis in its historical perspective.
Liquidity in the context of a banking crisis can refer either to currency or flexible goods. This book explores both views, arguing that a liquidity problem should be seen as an increased demand for currency. The book also addresses the question of whether systemic panic bank runs are always a case of market failure.
The volume examines where and how the market can fail in taking care of the liquidity problem, and explores the government’s role, offering suggestions for a new policy framework. This book will be of great interest to students and researchers in the field of banking and finance, as well as to practitioners and policy makers.
|Publisher:||Taylor & Francis|
|Series:||Routledge International Studies in Money and Banking Series , #70|
|Product dimensions:||6.14(w) x 9.21(h) x 0.63(d)|
About the Author
Gurbachan Singh is a visiting faculty member in the Planning Unit (Department of Economics), Indian Statistical Institute (ISI), Delhi.
Table of Contents
1. Introduction 2. Non-diversifiable risks and solvency of banks 3. The rationale for demand deposits and short term funds 4. Liquidity – flexible goods or hard money? 5. Some building blocks (line of credit, and broad policy framework) 6. Near-systemic bank runs 7. Systemic bank runs 8. Shift from deposits to gold (under hypothetical Gold Standard) 8. Inelastic supply of desired assets, and banking crisis 9. Ordinary deposits and indexed deposits 10. More on banking crises 11. 100% reserve banking, and the nature of inefficiency 12. Summary, conclusions and policy implications