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Banks and liquidity

Authors :
Diamond, Douglas W.
Rajan, Raghuram G.
Source :
American Economic Review. May, 2001, Vol. 91 Issue 2, p422, 4 p.
Publication Year :
2001

Abstract

Banks must strike a delicate balance to maintain liquidity. Enough reserves need to be maintained to cover unexpected runs by depositors. Yet banks must lend and invest money to make money. This balancing act is examined.

Details

ISSN :
00028282
Volume :
91
Issue :
2
Database :
Gale General OneFile
Journal :
American Economic Review
Publication Type :
Academic Journal
Accession number :
edsgcl.79052669