01734cas a2200241 a 4500 AALejournalIMF004588 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451865240 1018-5941 BD-DhAAL BD-DhAAL Ueda, Kenichi. Banks As Coordinators of Economic Growth / Kenichi Ueda. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (75 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper formally identifies an important role of banks: Banks competitively internalize production externalities and facilitate economic growth. I formulate a canonical growth model with externalities as a game among consumers, firms, and banks. Banks compete for deposits to seek monopoly profits, including externalities. Using loan contracts that specify price and quantity, banks control firms' investments. Each bank forms a firm group endogenously and internalizes externalities directly within a firm group and indirectly across firm groups. This unique equilibrium requires a condition that separates competition for sources and uses of funds. I present a realistic institution that satisfies this condition. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2006/264 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/264/001.2006.issue-264-en.xml IMF e-Library