Is management of risk sharing by banks a cause for bank runs?
| dc.contributor.author | Abraham, Haim | |
| dc.date.accessioned | 2018-06-05T13:35:45Z | |
| dc.date.available | 2018-06-05T13:35:45Z | |
| dc.date.issued | 2010 | |
| dc.date.updated | 2016-01-13T11:15:38Z | |
| dc.description.abstract | A bank, acting as a central planner under aggregate full certainty, optimizes liquidity allocation by sharing risk between discrete number of depositors. This paper demonstrates the following. (a) It is sufficient to rule out a bank run if all depositors inform the bank their types, patient or impatient, in advance, in a noncommittal manner. There cannot be a bank run because depositors’ strategic behaviour induces the bank to act as a central planner under aggregate full certainty. (b) The impossibility of a bank run is consistent with the price mechanism in partial equilibrium; but it may be inconsistent with the price mechanism in general disequilibrium. (c) The paper concludes that the management of risk sharing by banks is not a cause for bank runs. | |
| dc.identifier.apacitation | Abraham, H. (2010). Is management of risk sharing by banks a cause for bank runs?. <i>South African Journal of Business Management</i>, http://hdl.handle.net/11427/28227 | en_ZA |
| dc.identifier.chicagocitation | Abraham, Haim "Is management of risk sharing by banks a cause for bank runs?." <i>South African Journal of Business Management</i> (2010) http://hdl.handle.net/11427/28227 | en_ZA |
| dc.identifier.citation | Abraham, H. (2010). Is management of risk sharing by banks a cause for bank runs?. South African Journal of Business Management, 41(1), 51-55. | |
| dc.identifier.ris | TY - AU - Abraham, Haim AB - A bank, acting as a central planner under aggregate full certainty, optimizes liquidity allocation by sharing risk between discrete number of depositors. This paper demonstrates the following. (a) It is sufficient to rule out a bank run if all depositors inform the bank their types, patient or impatient, in advance, in a noncommittal manner. There cannot be a bank run because depositors’ strategic behaviour induces the bank to act as a central planner under aggregate full certainty. (b) The impossibility of a bank run is consistent with the price mechanism in partial equilibrium; but it may be inconsistent with the price mechanism in general disequilibrium. (c) The paper concludes that the management of risk sharing by banks is not a cause for bank runs. DA - 2010 DB - OpenUCT DP - University of Cape Town J1 - South African Journal of Business Management LK - https://open.uct.ac.za PB - University of Cape Town PY - 2010 T1 - Is management of risk sharing by banks a cause for bank runs? TI - Is management of risk sharing by banks a cause for bank runs? UR - http://hdl.handle.net/11427/28227 ER - | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/11427/28227 | |
| dc.identifier.vancouvercitation | Abraham H. Is management of risk sharing by banks a cause for bank runs?. South African Journal of Business Management. 2010; http://hdl.handle.net/11427/28227. | en_ZA |
| dc.language.iso | eng | |
| dc.publisher.department | School of Economics | en_ZA |
| dc.publisher.faculty | Faculty of Commerce | en_ZA |
| dc.publisher.institution | University of Cape Town | |
| dc.source | South African Journal of Business Management | |
| dc.source.uri | https://journals.co.za/content/journal/busman | |
| dc.title | Is management of risk sharing by banks a cause for bank runs? | |
| dc.type | Journal Article | |
| uct.type.filetype | Text | |
| uct.type.filetype | Image |