Authors:

  • Samuel Hanson
  • Andrei Shleifer
  • Jeremy Stein

Excerpt

Banks as Patient Fixed Income Investors. Samuel G. Hanson, Andrei Shleifer, Jeremy Stein, August 2014, Paper. "We examine the business model of traditional commercial banks in the context of their coexistence wit shadow banks. While both types of intermediaries create safe “money-like” claims, they go about this in very different ways. Traditional banks create safe claims with a combination of costly equity capital and fixed income assets that allows their depositors to remain “sleepy”: They do not have to pay attention to transient fluctuations in the mark-to-market value of bank assets. In contrast..." Link Verified October 18, 2014