Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/27675 
Year of Publication: 
2008
Series/Report no.: 
Economics Working Paper No. 2008-20
Publisher: 
Kiel University, Department of Economics, Kiel
Abstract: 
Currently, private trust in commercial banks declines as a consequence of today´s financial crisis. As past crises, e.g. the Asian crisis, show, the loss of confidence in the financial sector typically causes private agents to withdraw their capital from financial institutions. Thus, the purpose of this paper is to implement the feature of early deposit withdrawal in a New Keynesian framework with commercial banks in order to analyze the implications of a loss of confidence. In addition, we present the optimal monetary policy to ensure a stabilized system.
Subjects: 
banks
financial crises
deposit withdrawal
optimal monetary policy
JEL: 
E50
G01
E44
Document Type: 
Working Paper

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