01803cas a2200253 a 4500 AALejournalIMF011462 230101c9999 xx r poo 0 0eng d 5.00 USD 9781463927295 1018-5941 BD-DhAAL BD-DhAAL Lucchetta, Marcella. Bank Competition and Financial Stability : A General Equilibrium Exposition / Marcella Lucchetta, Gianni De Nicolo. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (39 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 We study versions of a general equilibrium banking model with moral hazard under either constant or increasing returns to scale of the intermediation technology used by banks to screen and/or monitor borrowers. If the intermediation technology exhibits increasing returns to scale, or it is relatively efficient, then perfect competition is optimal and supports the lowest feasible level of bank risk. Conversely, if the intermediation technology exhibits constant returns to scale, or is relatively inefficient, then imperfect competition and intermediate levels of bank risks are optimal. These results are empirically relevant and carry significant implications for financial policy. Mode of access: Internet De Nicolo, Gianni. IMF Working Papers; Working Paper ; No. 2011/295 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/295/001.2011.issue-295-en.xml IMF e-Library