Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/168262
Authors: 
Voellmy, Lukas
Year of Publication: 
2017
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2017: Alternative Geld- und Finanzarchitekturen - Session: Banking IV G15-V3
Abstract: 
This paper proposes a new theory of shadow banking that highlights the role of the cap on deposit insurance at traditional banks. Very risk averse investors with large endowments (institutional cash-pools) are looking for the best alternative to insured bank deposits. This is provided by shadow banks that invest exclusively in assets with very low credit risk. In equilibrium, investors face a trade-off between shadow banks with low fundamental risk and commercial banks with low run risk.
JEL: 
G2
Document Type: 
Conference Paper

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