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Persistence of regulatory innovation: MMMFs and financial intermediaries

Authors :
Whiting, Cathleen
Source :
Journal of Economic Behavior & Organization. May, 1994, Vol. 23 Issue 3, p321, 22 p.
Publication Year :
1994

Abstract

Financial innovations resulting from regulation may persist even after deregulation if their fixed costs are too high in the absence of strict regulation. The entry of money market mutual funds (MMMFs) illustrates this phenomenon by substituting for thrift bank deposits. This substitutability remained even after deregulation, thereby reducing thrift bank's market share. Rising GNP allows MMMFs to gain market share that might have been acquired by banking institutions.

Details

ISSN :
01672681
Volume :
23
Issue :
3
Database :
Gale General OneFile
Journal :
Journal of Economic Behavior & Organization
Publication Type :
Academic Journal
Accession number :
edsgcl.16127940