The economics of banking

The Economics of Banking provides an accessible overview of banking theory and practice. It introduces readers to the building blocks of fundamental theories and provides guidance on state-of-the-art research, reflecting the dramatic changes in the banking industry and banking research over the past...

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Detalles Bibliográficos
Otros Autores:	Cao, Jin, 1977- author (author)
Formato:	Libro electrónico
Idioma:	Inglés
Publicado:	Abingdon, Oxon ; New York, New York : Routledge [2022]
Edición:	1st ed
Materias:	Banks and banking.
Ver en Biblioteca Universitat Ramon Llull:	https://discovery.url.edu/permalink/34CSUC_URL/1im36ta/alma991009674737606719

Tabla de Contenidos:

Cover
Half Title
Title Page
Copyright Page
Contents in Brief
Table of Contents
List of figures
Preface
Acknowledgments
Acronyms
PART I: INTRODUCTION
CHAPTER 1 INTRODUCTION
1.1 What are banks and why are they special?
1.2 Structure of this book
1.3 Exercises
PART II: THE MICROECONOMICS OF BANKING
CHAPTER 2 FRAGILE BANKS
2.1 Introduction
2.2 Bank liquidity creation and bank run
2.2.1 Liquidity preferences and the need for liquidity insurance
2.2.2 Baseline result: the planner's solution
2.2.3 Resource allocation in a decentralized economy
2.2.4 Bank run: fundamental-driven versus panic-driven
2.2.5 Fragile banks and policy implications
2.2.6 Equilibrium refinement and equilibrium selection
2.2.7 Summary
2.3 Optimal bank run
2.3.1 Modelling aggregate asset return risks
2.3.2 Optimal risk-sharing with zero liquidation cost
2.3.3 Optimal risk-sharing with positive liquidation cost
2.3.4 Summary
2.4 Fragility and bank liquidity
2.4.1 Model setup: the need for fragility
2.4.2 Constrained efficiency
2.4.3 Market liquidity and funding liquidity
2.4.4 Summary
2.5 Empirical evidence: drivers of bank runs and policy responses
2.6 Exercises
CHAPTER 3 INFORMATION FRICTIONS IN BANKING
3.1 Introduction
3.2 Bank as delegated monitor
3.2.1 Asymmetric information and monitoring
3.2.2 Costly monitoring under direct lending
3.2.3 Bank and delegated monitoring
3.2.4 Summary
3.3 Monitoring and Capital
3.3.1 Model setup
3.3.2 Direct lending
3.3.3 Banking solution
3.3.4 Summary
3.4 Credit rationing
3.4.1 Model setup
3.4.2 Credit rationing in market equilibrium
3.4.3 Adverse selection and lending efficiency
3.4.4 Summary
3.5 Positive selection and excess lending.
3.5.1 Market equilibrium under positive selection
3.5.2 Positive selection and excess lending
3.5.3 Summary
3.6 Empirical evidence
3.6.1 Relationship banking
3.6.2 Credit rationing
3.7 Exercises
CHAPTER 4 INDUSTRIAL ORGANIZATION OF BANKING
4.1 Introduction
4.2 Price setting of competitive banks
4.3 Competition and stability: a static choice
4.3.1 Franchise value hypothesis
4.3.2 Moral hazard hypothesis
4.3.3 Summary
4.4 Competition and stability: a dynamic choice
4.4.1 Risk-taking as dynamic decision-making
4.4.2 Risk-taking: short-run gain versus long-run loss
4.4.3 Policy implication
4.5 Market entry under asymmetric information
4.5.1 Credit market with imperfect screening
4.5.2 Competition and market outcome
4.5.3 Winner's curse on market entry
4.6 Empirical evidence
4.6.1 Measuring the intensity of competition
4.6.2 Identifying the competition effects on bank behavior
4.6.3 Real effects of banking competition
4.7 Exercises
CHAPTER 5 SECURITIZED BANKING
5.1 Introduction
5.1.1 Risk appetite and securitization
5.1.2 Procedure of securitization
5.1.3 Repo and securitized banking
5.2 Loan sale and screening
5.2.1 Modelling loan sale and screening effort
5.2.2 Inefficient screening with loan sales
5.2.3 Summary
5.3 Securitized banking and financial instability
5.3.1 Originate-to-distribute and repo
5.3.2 Market equilibrium
5.3.3 Summary
5.4 Repo runs
5.4.1 Modelling dynamic collateralized lending
5.4.2 Non-run equilibrium
5.4.3 Run on the repos
5.4.4 Summary
5.5 Empirical evidence
5.5.1 Does securitization encourage banks' risk-taking?
5.5.2 Securitization and bank performance
5.5.3 International evidence
5.6 Exercises
CHAPTER 6 COMPLEXITY IN BANKING
6.1 Introduction
6.1.1 Organizational complexity.
6.1.2 Complexity in products
6.1.3 Network complexity
6.1.4 Opacity
6.2 Strategic complexity in product
6.2.1 Model setup: agents, preferences, and technologies
6.2.2 Market power and product complexity
6.2.3 Summary
6.3 Network complexity
6.3.1 Banking network as a web of claims
6.3.2 Risk sharing through financial networks
6.3.3 Contagion over banking network
6.3.4 Summary
6.4 Opacity and banking
6.4.1 Model setup: agents, preferences, and technologies
6.4.2 Market funding, bank funding, and the role of opacity
6.4.3 Summary
6.5 Empirical evidence
6.5.1 Interbank network and contagion
6.5.2 Opacity measures and bank risk
6.6 Exercises
PART III: THE MACROECONOMICS AND POLITICAL ECONOMY OF BANKING
CHAPTER 7 CENTRAL BANKING
7.1 Introduction
7.2 Central banking in practice
7.2.1 Quantity tools and price tools
7.2.2 Conducting monetary policy in normal times
7.2.3 Conducting monetary policy in financial crises
7.3 Monetary policy, liquidity management, and bank lending
7.3.1 Bank lending and liquidity risk exposure
7.3.2 Liquidity management and bank lending channel
7.3.3 Summary
7.4 Monetary policy, maturity transformation, and liquidity risks
7.4.1 Maturity transformation in a monetary economy
7.4.2 Central banking and excess liquidity risk
7.4.3 Summary
7.5 Risk-taking channels of monetary policy
7.5.1 Modelling banks' risk-shifting incentives
7.5.2 Risk-taking channels
7.5.3 Summary
7.6 Empirical Evidence
7.6.1 Identifying bank lending channel
7.6.2 Risk-taking channel of monetary policy
7.6.3 Bank lending under unconventional monetary policy
7.7 Exercises
CHAPTER 8 THE BANKING-MACRO LINKAGES
8.1 Introduction
8.2 Costly state verification and the financial accelerator.
8.2.1 Lending under costly state verification
8.2.2 Market equilibrium with no asymmetric information
8.2.3 Market equilibrium with asymmetric information
8.2.4 Summary
8.3 Moral hazard and bank lending
8.3.1 Aggregate deposit supply without financial friction
8.3.2 Aggregate deposit demand under financial friction
8.3.3 Summary
8.4 Overborrowing and excess volatility
8.4.1 Collateralized lending and borrowing constraint
8.4.2 Binding borrowing constraint and excess volatility
8.4.3 Summary
8.5 Risk management and the leverage cycle
8.5.1 Market equilibrium and asset price
8.5.2 VaR, asset price, and the leverage cycle
8.5.3 Summary
8.6 General equilibrium effect and the leverage cycle
8.6.1 Agents, time preferences, and technology
8.6.2 Market equilibrium without borrowing
8.6.3 Market equilibrium with borrowing
8.6.4 The business cycle and the leverage cycle
8.6.5 Summary
8.7 Exercises
CHAPTER 9 INTERNATIONAL BANKING
9.1 Introduction
9.1.1 The ownership dimension of international banking
9.1.2 The location dimension of international banking
9.1.3 The currency dimension of international banking
9.2 International financial market and global risk-sharing: traditional view
9.2.1 Global risk-sharing in an endowment economy
9.2.2 Global risk-sharing in a production economy
9.2.3 Summary
9.3 Global banks and international transmission of monetary policy
9.3.1 Model setup: global bank and global balance sheet
9.3.2 International transmission of monetary policy through global banks
9.3.3 Summary
9.4 Empirical evidence
9.4.1 International banking and transmission of monetary policy
9.4.2 International risk-taking channel
9.5 Exercises
CHAPTER 10 POLITICAL ECONOMY IN BANKING
10.1 Introduction.
10.2 Government ownership and banking outcomes
10.2.1 Government ownership and banking: main hypotheses
10.2.2 Modelling government ownership and control rights
10.2.3 Political economy equilibrium
10.2.4 Summary
10.3 Political credit cycle
10.3.1 Reelection and credit supply to voters
10.3.2 Credit supply over election cycles
10.3.3 Summary
10.4 Empirical evidence
10.4.1 Government ownership and banking outcomes
10.4.2 Legal systems and banking
10.4.3 Political ties and banking outcomes
10.4.4 Political credit cycles
10.4.5 Moral suasion and home bias
10.4.6 Political economy and allocation efficiency
10.5 Exercises
PART IV: THE ECONOMICS OF BANKING REGULATION
CHAPTER 11 SYSTEMIC RISKS AND MACROPRUDENTIAL REGULATION
11.1 Introduction
11.1.1 Why is banking regulation special?
11.1.2 Bank-specific versus systemic risks
11.2 Maturity rat race and excess maturity mismatch
11.2.1 Maturity structure of debt contracts
11.2.2 Debt rollover and maturity rat race
11.2.3 Summary
11.3 Inefficient liquidity buffer and sellers' strike
11.3.1 Model setup
11.3.2 Market equilibrium
11.3.3 Summary
11.4 Contagion in interbank market
11.4.1 Idiosyncratic liquidity shocks and interbank market
11.4.2 Equilibrium outcomes in the interbank market
11.4.3 Contagion through interbank market
11.4.4 Summary
11.5 Macroprudential versus microprudential perspectives
11.6 Empirical evidence: measuring systemic risks
11.6.1 CoVaR
11.6.2 Systemic expected shortfall
11.6.3 SRISK
11.7 Exercises
CHAPTER 12 BANKING REGULATION IN PRACTICE
12.1 Introduction: banking regulation in principles
12.2 Liquidity regulation
12.2.1 Idiosyncratic and systemic liquidity risks
12.2.2 Lender-of-last-resort policy.
12.2.3 Requirements on market liquidity and funding liquidity.

The economics of banking

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