Professor Tatiana Damjanovic tatiana.damjanovic@durham.ac.uk
Professor
Professor Tatiana Damjanovic tatiana.damjanovic@durham.ac.uk
Professor
Professor Tatiana Damjanovic tatiana.damjanovic@durham.ac.uk
Professor
Charles Nolan
Should we break up banks and limit bailouts? We study vertical integration of deposit-taking institutions with those investing in risky equity. Integration eliminates a credit spread, reducing aggregate banking sector profitability; so while integration increases output it also entails larger, more frequent bailouts of retail customers. Bailouts boost economic activity but are costly. The optimal structure of banking depends on the efficiency of government intervention, the competitiveness of the banking sectors and shocks. Separated institutions are preferred when government bailouts are costly. Optimal bank regulation tolerates profits at investment and universal banks to limit bailouts, but imposes strict antitrust on retail banks.
Damjanovic, T., Damjanovic, V., & Nolan, C. (2020). Default, bailouts and the vertical structure of financial intermediaries. Review of Economic Dynamics, 38, 154-180. https://doi.org/10.1016/j.red.2020.04.002
Journal Article Type | Article |
---|---|
Acceptance Date | Apr 3, 2020 |
Online Publication Date | Apr 9, 2020 |
Publication Date | Oct 1, 2020 |
Deposit Date | Apr 13, 2020 |
Publicly Available Date | Oct 9, 2021 |
Journal | Review of Economic Dynamics |
Print ISSN | 1094-2025 |
Publisher | Elsevier |
Peer Reviewed | Peer Reviewed |
Volume | 38 |
Pages | 154-180 |
DOI | https://doi.org/10.1016/j.red.2020.04.002 |
Public URL | https://durham-repository.worktribe.com/output/1273418 |
Accepted Journal Article
(1.4 Mb)
PDF
Publisher Licence URL
http://creativecommons.org/licenses/by-nc-nd/4.0/
Copyright Statement
© 2020 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Unconditionally Optimal Ramsey policy
(2021)
Journal Article
Optimal Fiscal Policy in a Model of Firm Entry and Financial Frictions
(2019)
Journal Article
Economic Growth and Evolution of Gender Equality
(2019)
Journal Article
The Macroeconomic Implications of Firm Selection
(2018)
Preprint / Working Paper
Unconditionally Optimal Ramsey policy
(2017)
Preprint / Working Paper
About Durham Research Online (DRO)
Administrator e-mail: dro.admin@durham.ac.uk
This application uses the following open-source libraries:
Apache License Version 2.0 (http://www.apache.org/licenses/)
Apache License Version 2.0 (http://www.apache.org/licenses/)
SIL OFL 1.1 (http://scripts.sil.org/OFL)
MIT License (http://opensource.org/licenses/mit-license.html)
CC BY 3.0 ( http://creativecommons.org/licenses/by/3.0/)
Powered by Worktribe © 2025
Advanced Search