Banks as patient fixed-income investors

Abstract

We examine the business model of traditional commercial banks when they compete with shadow banks. While both types of intermediaries create safe “money-like” claims, they go about this in different ways. Traditional banks create money-like claims by holding illiquid fixed-income assets to maturity, and they rely on deposit insurance and costly equity… (More)
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Citation Velocity: 7

Averaging 7 citations per year over the last 3 years.

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