Bank of Toronto

 [This is the last half of a two-part critique of Douglas Diamond and Philip Dybvig's highly influential paper purporting to show that fractional reserve banking systems are inherently unstable. Part I can be found here.] Sauce for the Goose… Half a century after the fact, the "aggregate…

Bank Run

Has any theoretical work on banking been more influential than Douglas Diamond and Phillip Dybvig's 1983 JPE article, "Bank Runs, Deposit Insurance, and Liquidity"? If so, I can't think of it. With well over 12,000 Google citations and counting, it's certainly among the most cited academic papers…

Mnuchin v. Waters

On November 19, Treasury Secretary Steven Mnuchin announced that he would sunset five of the Federal Reserve's emergency lending programs at year-end: the Primary Market Corporate Credit Facility, Secondary Market CCF, Municipal Liquidity Facility, Main Street Lending Program, and Term Asset-Backed Securities Loan Facility (TALF). His decision,…