Risk and Macro Finance: Jason Donaldson (Washington University in St Louis)

14sep2017 13:00 - 14:30

Lezing

'Warehouse Banking'

Abstract:

We develop a theory of banking that explains why banks started out as commodities warehouses. We show that warehouses become banks because their superior storage technology allows them to enforce the repayment of loans most effectively. Further, interbank markets emerge endogenously to support this enforcement mechanism. Even though warehouses store deposits of real goods, they make loans by writing new “fake” warehouse receipts, rather than by taking deposits out of storage. Our theory helps to explain how modern banks create funding liquidity and why they combine warehousing (custody and deposit-taking), lending, and private money creation within the same institutions. It also casts light on a number of contemporary regulatory policies.

Location

REC M3.02

Route description

  • Roeterseilandcampus - building M

    Plantage Muidergracht 12 | 1018 TV Amsterdam
    +31 (0)20 525 5250

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Gepubliceerd door  Economie en Bedrijfskunde