search query: @indexterm FINANCIAL INTERMEDIARIES / total: 113
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| Author: | Aizenman, J. Powell, A. |
| Title: | Volatility and financial intermediation |
| Journal: | Journal of International Money and Finance
2003 : AUG, VOL. 22:4, p. 657-679 |
| Index terms: | Financial intermediaries Volatility Working capital |
| Language: | eng |
| Abstract: | The authors consider an economy where risk neutral banks provide intermediation services and risk netural procedures demand credit to finance their working capital needs. The model blends costly state verification with imperfect enforcement power. It is shown that a weak legal system combined with high information verification costs leads to large, first-order effects of volatility on production, employment and welfare. |
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