The current note illustrates how the exogenous imposition of financial transparency on the optimal incentive compatible demand deposit contract designed by a bank, allowing depositors to observe the balance sheet of the bank before withdrawing, may trigger a run with probability one despite the application of the revelation principle to the initial post-deposit game defined by the contract mechanism offered by the bank.
Financial transparency and bank runs / Di Caprio, D.; Santos-Arteaga, F. J.. - In: APPLIED MATHEMATICAL SCIENCES. - ISSN 1312-885X. - STAMPA. - 6:77-80(2012), pp. 3839-3844.
Financial transparency and bank runs
Di Caprio D.;
2012-01-01
Abstract
The current note illustrates how the exogenous imposition of financial transparency on the optimal incentive compatible demand deposit contract designed by a bank, allowing depositors to observe the balance sheet of the bank before withdrawing, may trigger a run with probability one despite the application of the revelation principle to the initial post-deposit game defined by the contract mechanism offered by the bank.File in questo prodotto:
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