Alternative approaches to the theory of the banking firm

Abstract During the past decade, the importance of a sound microeconomic foundation for aggregate economic analysis has been increasingly emphasized. In this context, a satisfactory theory of bank behaviour appears as an indispensable prerequisite for a clear understanding of the workings of the financial sector of the economy. This has led to the development of a substantial literature attempting to model and explain the behaviour of banking firms. This paper presents a survey and discussion of the various approaches which can be found in this literature. A special effort is made to present an integrated view of the real resource and financial aspect: of banking activities.

[1]  J. Kareken.  Commercial banks and the supply of money: a market-determined demand deposit rate , 1967 .

[2]  Burton G. Malkiel,et al.  Bank Portfolio Allocation, Deposit Variability, and the Availability Doctrine , 1965 .

[3]  Jürg Niehans,et al.  The Theory of Money. , 1979 .

[4]  Dwight M. Jaffee,et al.  On the Application of Portfolio Theory to Depository Financial Intermediaries , 1974 .

[5]  David H. Pyle.  ON THE THEORY OF FINANCIAL INTERMEDIATION , 1971 .

[6]  Ernst Baltensperger,et al.  Economies of Scale, Firm Size, and Concentration in Banking , 1972 .

[7]  F. Ritzmann.  Die Schweizer Banken : Geschichte, Theorie, Statistik , 1973 .

[8]  B. Pesek.  Bank's Supply Function and the Equilibrium Quantity of Money , 1970 .

[9]  Michael A. Goldberg,et al.  Bank Management and Portfolio Behavior. , 1975 .

[10]  D. Aigner,et al.  A SIMPLE MODEL OF INFORMATION AND LENDING BEHAVIOR , 1968 .

[11]  Michael A. Klein.  A Theory of the Banking Firm , 1971 .

[12]  C. W. Sealey,et al.  Inputs, Outputs, and a Theory of Production and Cost at Depository Financial Institutions , 1977 .

[13]  Robert J. Barro,et al.  The Loan Market, Collateral, and Rates of Interest , 1976 .

[14]  T. R. Saving.  A theory of the money supply with competitive banking , 1977 .

[15]  Alain C. Enthoven,et al.  Money in a Theory of Finance. , 1960 .

[16]  J. Pringle.  A Theory of the Banking Firm: Comment , 1973 .

[17]  A. Knobel.  The Demand for Reserves by Commercial Banks , 1977 .

[18]  S. Miller.  A theory of the banking firm: Comment , 1975 .

[19]  E. Baltensperger.  Optimal Bank Portfolios: The Liability Side , 1973 .

[20]  Richard E. Towey.  Money Creation and the Theory of the Banking Firm , 1974 .

[21]  Anthony M. Santomero,et al.  DETERMINING AN OPTIMAL CAPITAL STANDARD FOR THE BANKING INDUSTRY , 1977 .

[22]  E. Fama,et al.  CASH BALANCE AND SIMPLE DYNAMIC PORTFOLIO PROBLEMS WITH PROPORTIONAL COSTS , 1969 .

[23]  M. Parkin.  Discount House Portfolio and Debt Selection , 1970 .

[24]  C. Freedman.  Micro Theory of International Financial Intermediation , 1977 .

[25]  F. Edwards,et al.  Interest Rates on Savings Deposits. , 1976 .

[26]  J. Pringle.  THE CAPITAL DECISION IN COMMERCIAL BANKS , 1974 .

[27]  Dwight M. Jaffee,et al.  The Determinants of Deposit-Rate Setting by Savings and Loan Associations , 1970 .

[28]  E. Baltensperger.  The Precautionary Demand for Reserves , 1974 .

[29]  G. R. Morrison.  Liquidity preferences of commercial banks , 1967 .

[30]  R. Porter.  A Model of Bank Portfolio Selection , 1960 .

[31]  Merton H. Miller,et al.  A Model of the Demand for Money by Firms , 1966 .

[32]  W. Poole.  COMMERCIAL BANK RESERVE MANAGEMENT IN A STOCHASTIC MODEL: IMPLICATIONS FOR MONETARY POLICY , 1968 .

[33]  L. White,et al.  A study of a monetary system with a pegged discount rate under different market structures , 1977 .

[34]  E. Baltensperger.  The Borrower-Lender Relationship, Competitive Equilibrium, and the Theory of Hedonic Prices , 1975 .

[35]  J. Hewson,et al.  The Eurodollar Market and Monetary Theory , 1976 .

[36]  Predictability of reserve demand, information costs and portfolio behavior of commercial banks , 1976 .

[37]  Ernst Baltensperger,et al.  Cost of Banking Activities: Interactions between Risk and Operating Costs , 1972 .

[38]  THE EFFECTS OF REGULATION ON BANK BALANCE SHEET DECISIONS , 1977 .

[39]  Yair E. Orgler,et al.  Output Mix and Jointness in Production in the Banking Firm , 1975 .

[40]  S. Greenbaum,et al.  Bank Capital and Public Regulation , 1978 .

[41]  R. Stillson.  An Analysis of Information and Transaction Services in Financial Institutions , 1974 .