Garcia, Valeriano F.
[VerfasserIn]
;
Cibils, Vicente Fretes
[Sonstige Person, Familie und Körperschaft];
Maino, Rodolfo
[Sonstige Person, Familie und Körperschaft]
Anmerkungen:
In: Islamic Economic Studies, Vol. 11, No. 2, 2004
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 1, 2004 erstellt
Beschreibung:
We document banking system instability arising from a combination of fractional reserve requirements, deposit insurance and moral hazard by presenting several episodes of severe banking distress and crises in Asia. Following a framework of functional perspective suggested by Merton and Bodie (1993), we argue that one hundred percent reserves, “narrow banking,” provides a basis for banking reform and an alternative to reduce the likelihood of systemic financial crises. Both the narrow banking and the Islamic system (equity-based systems) provide more stability to a banking sector than a conventional banking system does. Moreover, the interlinkages of financial markets and the scope for instantaneous reversal of capital flows carry potentially huge systemic risks that could prove costly in terms of economic growth and welfare