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…

Bank Capital, Basel accords, deposit insurance, lender of last resort, limited liability

One of the most important elements of contemporary financial regulation is bank capital adequacy regulation — the regulation of banks' minimum capital requirements.  Capital adequacy regulation has been around since at the least the 19th century, but whereas its previous incarnations were relatively simple, and usually not very…