Title of article
Deposit insuranceandmoneymarketfreezes
Author/Authors
Max Bruche، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2010
Pages
17
From page
45
To page
61
Abstract
In thepresenceofdepositinsurance,ariseincounterpartyriskmaycauseafreezein
interbankmoneymarkets.Weshowthisinageneralequilibriummodelwithregionally
segmentedbank-basedretailfinancialmarkets,inwhichmoneymarketsfacilitatethe
reallocationoffundsacrossbanksfromdifferentregions.Counterpartyriskcreatesan
asymmetrybetweenbanksinsavings-richregions,whichremainmarginallyfinanced
by theabundantregionalinsureddeposits,andinsavings-poorregions,whichhaveto
pay largespreadsinmoneymarkets.Thisasymmetrydistortstheaggregateallocation
of creditand,inthepresenceofdemandexternalities,cancauselargeoutputlosses.
Keywords
Deposit insuranceMoney marketsBank solvencyFinancial marketfreezes
Journal title
Journal of Monetary Economics
Serial Year
2010
Journal title
Journal of Monetary Economics
Record number
846371
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