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on Banking |
| By: | Kenichi Ueda |
| Abstract: | This paper formally identifies an important role of banks: Banks competitively internalize production externalities and facilitate economic growth. I formulate a canonical growth model with externalities as a game among consumers, firms, and banks. Banks compete for deposits to seek monopoly profits, including externalities. Using loan contracts that specify price and quantity, banks control firms' investments. Each bank forms a firm group endogenously and internalizes externalities directly within a firm group and indirectly across firm groups. This unique equilibrium requires a condition that separates competition for sources and uses of funds. I present a realistic institution that satisfies this condition. |
| Keywords: | Bank-oriented financial system , bank control , firm group , economic growth , Banks , Financial systems , Economic growth , Economic models , |
| Date: | 2006–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/264&r=ban |
| By: | Carlos Pestana Barrosa; Nicolas Peypoch; Jonathan Williams |
| Abstract: | This paper proposes a framework for benchmarking European co-operative banks and the rationalization of their operational activities. The analysis is based on the Luenberger productivity indicator. A key advantage of this method is that it allows for both input contraction and output expansion in determining relative efficiencies and productivity changes. Benchmarks are provided for improving the operations of those banks which perform worse than others. Several interesting and useful managerial insights and implications arise from the study. The general conclusion is that, between 1996 and 2003, productivity increased for the majority of European co-operative banks analyzed. |
| Keywords: | Europe; Co-operative banks; Luenberger productivity indicator. |
| JEL: | G21 D24 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp362006&r=ban |
| By: | Celine Rochon; Andrew Feltenstein |
| Abstract: | In this paper, we study the impact of labor market restructuring and foreign direct investment on the banking sector, using a dynamic general equilibrium model with a financial sector. Numerical simulations are performed using stylized Chinese data, and banks failures are generated through increases in the growth rate of the labor force, a revaluation of the exchange rate or an increase in debt issue to finance the government deficit, as compared to a benchmark scenario in which banks remain solvent. Thus bank failures can result from what might seem to be either beneficial economic trends, or correct monetary and fiscal policies. We introduce fiscal policies that modify relative factor prices by lowering the capital tax rate and increasing the tax rate on labor. Such policies can prevent banking failures by raising the return to capital. It is shown that such fiscal policies are, in the short run, welfare reducing. |
| Keywords: | Banking failures , fiscal policies , Banking , China , Fiscal policy , Tax rates , Labor markets , Foreign investment , Economic models , |
| Date: | 2006–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/263&r=ban |