Contemporary Banking Theory
Posted: 26 Oct 1999
We review the contemporary theory of financial intermediation. The focus is on the contribution in the past 15 years or so that have advanced our understanding of why financial intermediaries exist, the credit allocation decision and other services they provide in spot and forward credit markets, the contractual nature and allocational consequences of the claims they issue, and the optimal design of bank regulation.
JEL Classification: G2, G21
Suggested Citation: Suggested Citation