Please use this identifier to cite or link to this item:
http://dspace.mediu.edu.my:8181/xmlui/handle/10419/19737| Title: | Banks, markets, and efficiency |
| Keywords: | G21 E44 G10 ddc:330 Financial Intermediaries Risk Sharing Banking Competition Comparing Financial Systems Finanzmarkt Privater Haushalt Bank Wettbewerb Monopolistischer Wettbewerb Wohlfahrtseffekt Deutschland risk sharing |
| Issue Date: | 16-Oct-2013 |
| Description: | Following Diamond (1997) and Fecht (2004) we use a model in which financial market access of households restrains the efficiency of the liquidity insurance that banks' deposit contracts provide to households that are subject to idiosyncratic liquidity shocks. But in contrast to these approaches we assume spacial monopolistic competition among banks. Since monopoly rents are assumed to bring about inefficiencies, improved financial market access that limits monopoly rents also entails a positive effect. But this beneficial effect is only relevant if competition among banks does not sufficiently restrain monopoly rents already. Thus our results suggest that in the bank-dominated financial system of Germany, in which banks intensely compete for households' deposits, improved financial market access might reduce welfare because it only reduces risk sharing. In contrast, in the banking system of the U.S., with less competition for households' deposits, a high level of households' financial market participation might be beneficial. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/19737 |
| Other Identifiers: | http://hdl.handle.net/10419/19737 ppn:498455165 RePEc:zbw:bubdp2:4259 |
| Appears in Collections: | EconStor |
Files in This Item:
There are no files associated with this item.
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.