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Speech
Reflections on the Early Days of Reserve Management Purchases and the Maintenance of Ample Reserves
Remarks before the Money Marketeers of New York University, New York City.
Working Paper
On the welfare properties of fractional reserve banking
Supersedes Working Paper 13-32/R. Monetary economists have long recognized a tension between the benefits of fractional reserve banking, such as the ability to undertake more profitable (long-term) investment opportunities, and the difficulties associated with it, such as the risk of in-solvency for each bank and the associated losses to bank liability holders. I show that a specific banking arrangement (a joint-liability scheme) provides an effective mechanism for ensuring the ex-post transfer of reserves from liquid banks to illiquid banks, so it is possible to select a socially efficient ...