Handbook of Financial Intermediation and Banking

Edited by

  • Anjan V. Thakor, John E. Simon Professor of Finance and Director of the PhD Program, Olin School of Business, Washington University, St. Louis, MO, USA
  • Arnoud Boot, University of Amsterdam

The growth of financial intermediation research has yielded a host of questions that have pushed "design" issues to the fore even as the boundary between financial intermediation and corporate finance has blurred. This volume presents review articles on six major topics that are connected by information-theoretic tools and characterized by valuable perspectives and important questions for future research. Touching upon a wide range of issues pertaining to the designs of securities, institutions, trading mechanisms and markets, industry structure, and regulation, this volume will encourage bold new efforts to shape financial intermediaries in the future.
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Upper-division undergraduates, graduate students, professors, and professionals studying financial intermediation, in particular banking, financial systems, regulation, mutual funds, and interbank competition


Book information

  • Published: May 2008
  • Imprint: ELSEVIER
  • ISBN: 978-0-444-51558-2


"Boot and Thakor have done a wonderful job in putting together a collection of recent papers on financial intermediation. I particularly like their emphasis on current topics such as structured finance, bank consolidation, and Basel II regulation. A must read for anyone who wants to be informed about the current thinking in this evolving field." Luc Laeven, International Monetary Fund "Literally a tour de force with broad and deep coverage of the banking literature from a Finance perspective. A must-read for serious scholars and professionals that offers a clear and direct path to the cutting edge of current research in the field." Peter Rousseau, Vanderbilt University "Arnoud Boot and Anjan Thakor have gathered leading researchers working at the intersection of corporate finance and financial intermediation to review and synthesize the latest work in their fields. In addition to providing a concise overview of the state of the art in these important areas, the authors provide a critical assessment of the most promising avenues for future research. This text will likely prove to be an invaluable resource both for current researchers as well as new students of these disciplines." Peter M. DeMarzo, Stanford University “This book is an excellent collection of survey papers in the field of financial intermediation, written by leading researchers in the field. Given its broad coverage of topics and accessible style, it is highly recommended reading for students, teachers and professionals who want to refresh their knowledge of the literature, bring themselves to the frontier of the field, and explore open research questions.” Thorsten Beck, The World Bank

Table of Contents

OVERALL INTRODUCTION Arnoud W.A. Boot and Anjan V. ThakorSection 1: Design of Securities and Contracts Overview by Franklin Allen Paolo Fulghieri and Eitan Goldman “The Design of Debt Contracts” Anthony Sanders, Yongheng Deng and Xudong An “Subordination Levels in Structured Financing”Section 2: Market Structure and Structure of Financial Markets Christine Parlour and Duane Seppi “Limit Order Markets: A Survey”Section 3: Structure of Financial Institutions Overview by Mitch Berlin Philip E. Strahan “Bank Structure and Lending: What We Do and Do Not Know” Loretta J. Mester “Optimal Industrial Structure in Banking” Amar Gande “Commercial Banks in Investment Banking: A Survey” Section 4: Mutual Funds Overview by Sudipto Bhattacharya Bruce Lehmann and Allan Timmermann “Performance Measurement and Evaluation” Lu Zheng “The Behavior of Mutual Fund Investors” Sudipto Bhattacharya, Amil Dasgupta and Andrea Prat “Incentives in Funds Management: Foundations and Consequences” Section 5: Regulation Overview by Mark Flannery Kenneth D. Jones and Tim Critchfield “Consolidation in the U.S. Banking Industry: Is the ‘Long, Strange Trip’ About to End?” page Robert DeYoung “Safety, Soundness, and The Evolution of the U.S. Banking Industry” Mark Flannery and Kasturi P. Rangan “What Caused the Bank Capital Build-up of the 1990s?” Paul H. Kupiec “Basel II: A Case for Recalibration” Section 6: Competition and Regulation Overview by Xavier Vives “Competition and Regulation in Banking” Elena Carletti “Competition and Regulation in Banking” Hans Degryse and Steven Ongena “Competition and Regulation in the Banking Sector: A Review of the Empirical Evidence on the Sources of Bank Rents”