Recent Developments in Modeling Financial Intermediation

Recent Developments in Modeling Financial Intermediation

Financial Intermediation

The savings/investment process in capitalist economies is organized around financial intermediation, making them a central institution of economic growth. Financial intermediaries are firms that borrow from consumer/savers and lend to companies that need resources for investment. In contrast, in capital markets investors contract directly with firms, creating marketable securities. The prices o...

Comparing in Financial Intermediation

We explain informed capital by showing that projects can be screened by comparing loan applicants. Because efficient comparing requires centralized monitoring, it represents a novel rationale for financial intermediation. Positive scale effects may make a single monopoly intermediary optimal. Comparing can also eliminate the problems of adverse selection and inefficient investments.

Phytoestrogens: recent developments

Phytoestrogens are polyphenolic non-steroidal plant compounds with estrogen like activity exerted through estrogen receptors. These receptors are distributed in several tissues such as male and female reproductive systems, bones, cardiovascular and central nervous systems. These natural phenolic compounds include isoflavonoids, flavonoids, lignans and stilbenes. Isoflavonoids are the most studi...

Financial Intermediation Networks∗

We study a dynamic model of financial intermediation in which interbank lending is subject to moral hazard, where intermediaries can divert funds towards inefficient projects. We show that despite the presence of moral hazard, secured lending contracts can discipline the investment choices of all market participants — even those with whom they are not directly contracting — thus partially overc...