Credit, Intermediation, and the Macroeconomy

Sudipto Bhattacharya is currently Professor of Finance in the Department of Accounting and Finance at the London School of Economics and Political Science. Previously, he has taught at the Universities of Chicago, Stanford, Berkeley, Michigan, and Delhi. Arnoud Boot is Professor of Corporate Finance and Financial Markets at the Faculty of Economics and Econometrics at the University of Amsterdam and advisor to the Riksbanken (Central Bank of Sweden). He is also Research Fellow at the Centre for Economic Policy Research (CEPR) in London and at the Davidson Institute of the University of Michigan. Anjan Thakor is Edward J. Frey Professor of Banking and Finance at the University of Michigan Business School. He previously held appointments at Indiana University and UCLA.

Introduction ; PART I: MONITORING BY AND OF BANKS ; 1. Financial Intermediary Coalitions ; 2. The Role of Demandable Debt in Structuring Optimal Banking Arrangements ; 3. Monitoring, Liquidation, and Security Design ; 4. Financial Intermediation with Risk Aversion ; Discussion ; PART II: LIQUIDITY PROVISION VIA BANKS AND MARKETS ; 5. Liquidity, Banks, and Markets ; 6. Private and Public Supply of Liquidity ; 7. Financial Intermediation versus Stock Markets in a Dynamic Intertemporal Model ; 8. The Governance of Exchanges: Members' Cooperatives versus Outside Ownership ; Discussion ; PART III: BANK RUNS AND FINANCIAL CRISES ; 9. Banking Panics, Information and Rational Expectations Equilibrium ; 10. Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks ; 11. Contagion and Efficiency in Gross and Net Interbank Payment Systems ; Discussion ; PART IV: REGULATION OF FINANCIAL INTERMEDIARIES ; 12. Capital Requirements and the Behaviour of Commercial Banks ; 13. Is the Glass-Steagall Act Justified? A Study of the U.S. Experience with Universal Banking before 1993 ; 14. Optimal Design of Bank Bailouts: The case of transition economies ; Discussion ; PART V: FINANCIAL CONTRACTING AND INTERBANK COMPETITION ; 15. Reputation and Discretion in Fiancial Contracting ; 16. The Effect of Credit Market Competition on Lending Relationships ; 17. Long-Term Contracts, Short-Term Investment and Monitoring ; 18. Competition Among Financial Intermediaries when Diversification Matters ; Discussion ; PART VI: COMPARATIVE FINANCIAL SYSTEMS ; 19. Credit and Efficiency in Centralized and Decentralized Economies ; 20. Proprietary Information, Financial Intermediation, and Research Incentives ; 21. Financial System Architecture ; 22. Financial Markets, Intermediaries, and Intertemporal Smoothing ; Discussion ; PART VII: CREDIT MARKETS, INTERMEDIATION, AND THE MACROECONOMY ; 23. Financial Intermediation, Loanable Funds, and the Real Sector ; 24. Credit Cycles ; 25. Endogenous Cycles in a Stiglitz-Weiss Economy ; Discussion