EconPapers    
Economics at your fingertips  
 

Regulation, bank competitiveness, and episodes of missing money

John Duca

Economic and Financial Policy Review, 1993, issue Apr, 23 pages

Abstract: John Duca reviews three episodes of \"missing money,\" periods during which one of the monetary aggregates was unusually weak. Duca finds that in each of these episodes, an increased regulatory burden on banks encouraged households and firms to bypass the banking system in favor of nonbank financial liabilities and assets. Using a standard analytical framework, he shows how these shifts by investors can lead to cases of missing money and declines in banks' role in providing credit. Duca further shows that increases in bank regulatory burden can create potential problems for analysts in using either interest rates or real-time monetary aggregates as indicators of nominal economic activity. Given these findings, Duca argues that because regulatory changes have implications for conducting monetary policy, the Federal Reserve should continue to have a role in formulating bank regulations.

Keywords: Bank competition; Money (search for similar items in EconPapers)
Date: 1993
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.dallasfed.org/~/media/documents/research/er/1993/er9302a.pdf Full Text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedder:y:1993:i:apr:p:1-23

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Economic and Financial Policy Review from Federal Reserve Bank of Dallas Contact information at EDIRC.
Bibliographic data for series maintained by Amy Chapman ().

 
Page updated 2025-03-30
Handle: RePEc:fip:fedder:y:1993:i:apr:p:1-23