We show that the regulation of bank lending practices is necessary for the optimal provision of private liquidity. In an environment in which bankers cannot commit to repay their creditors, we show that neither an unregulated banking system nor narrow banking can provide the socially e¢ cient amount of liquidity. If the bankers provided such an amount, then they would prefer to default on their...

The past three decades have seen an extraordinary transformation in the conduct of monetary policy. In the 1970s, inflation had risen to very high levels, with most countries, including the United States, experiencing inflation rates in the double digits. Today, almost all nations in the world are in a low inflation environment. Of 223 countries, 193 currently have annual inflation rates less t...

This paper attempts to estimate the efficiency of the top 300 Asia Pacific Banks, as ranked by the Asian bankers, through a cross country analysis. We use a non-parametric frontier technique called data envelopment analysis (DEA) to derive technical and scale efficiency measures for these banks in 2006. The sensitivity of DEA efficiency of various input-output variables combination is investiga...

We study banking using the tools of mechanism design, without a priori assumptions about what banks are, who they are, or what they do. Given preferences, technologies, and certain frictions –including limited commitment and imperfect monitoring –we describe the set of incentive feasible allocations and interpret the outcomes in terms of institutions that resemble banks. Our bankers endogenousl...

This paper is about three points: network bridges are critical to the advantage known as social capital, bridges relative to other kinds of relationships show faster rates of decay over time, and the faster decay in bridges has implications for the stability of social capital. A bridge connects people not otherwise connected; in other words, it spans a structural hole in the surrounding organiz...

eographic markets are currently defined by market analysts at each of the twelve Federal Reserve Banks, with oversight by the Federal Reserve Board and even the U.S. Supreme Court. In 1963, in U.S. v. Bank of Philadelphia, the Court ruled that the market for bank deposits is local. That 1963 ruling still unifies market analysis at each of the twelve Reserve Banks. The flavor of analysis differs...