Creator: Bryant, John B. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 126 Abstract:
A model is presented in which demand deposits backed by fractional currency reserves and public insurance can be beneficial. The model uses Samuelson's pure consumption-loans model. The case for demand deposits, reserves, and deposit insurance rests on costs of illiquidity and incomplete information. The effect of deposit insurance depends upon how, and at what cost, the government meets its insurer's obligation--something which is not specified in practice. It remains possible that demand deposits and deposit insurance are a distortion, and reserve requirements serve only to limit the size of this distortion.
Stichwort: Bank panic, Reserve requirements, Insolvency, Banks, and Bond reserve Fach: G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages and E58 - Central Banks and Their Policies
Creator: Duprey, James N. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 071 Abstract:
This paper briefly recounts several of the key financial developments of 1974, describes the contingency planning exercise developed by the Minneapolis Federal Reserve Bank to encourage planning by large member banks, and then discusses some of the comments received in a trial run. The Appendix contains a copy of the exercise together with an illustrative example.
Stichwort: Banking, Contingency planning, Loss of confidence, 1974 banking crisis, and Emergency lending program Fach: G28 - Financial Institutions and Services: Government Policy and Regulation, G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages, and E58 - Central Banks and Their Policies