Banks, Maturity Mismatches and Liquidity Crises: A Simple Model

Ramkishen Rajan and Graham Bird

Economia Internazionale / International Economics, 2003, vol. 56, issue 2, 185-192

Abstract: In determining the maturity structure of bank loans in the presence of pre-determined short-term international liabilities, we show that maturity mismatches in banks’ balance sheets are fully consistent with the assumption of banks acting as self-interested, optimising agents. Although often attributed to the moral hazard associated with safety nets, the analysis shows that financial crises can occur in their absence.

Keywords: Banks; currency crisis; East Asia; maturity mismatches; moral hazard (search for similar items in EconPapers)
JEL-codes: F34 F39 G21 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0160

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