We analyze a banking system in which the class of feasible deposit contracts, or
mechanisms, is broad. The mechanisms must satisfy a sequential service constraint, but …

The last three decades have seen governments around the world remove a number of
restrictions from financial markets and payments systems. Technological innovations have …

This paper critically examines the theoretical literature on banking instability that has
followed Diamond and Dybvig (1983). It explores the extent to which it (a) explains banking …

Can the'invisible hand'handle money? George Selgin challenges the view that government
regulation creates monetary order and stability, and instead shows it to be the main source …

In an economy with uninsured banks, market rate deposits are shown to provide services
identical to fixed rate deposits without risking banking panics as long as there is not both …

Due to a variety of reasons, the Greek economy faced a severe crisis being a member of
EMU. Nonetheless, the country's banking system experienced a dramatic outflow of …

The Diamond-Dybvig (DD) model is often cited as a theoretical justification for government
deposit insurance. In the model, rational agents find it in their interest to withdraw their bank …

Most people believe that the benefits of deposit insurance provided by the Federal Deposit
Insurance Corporation (FDIC) clearly exceed the costs. However, a growing literature …

In a general equilibrium model with risk neutral and risk averse agents, we show that if
banks issue both demand deposits and equity, then free banking is run-proof and efficient. In …

Reform of the financial services industry7 became a hotly debated issue in the 1980s, and
this debate continues to rage in the 1990s. Much of the debate has been generated by a …