June 11, 2010

Special Issue of the Richmond Fed's Economic Quarterly Surveys the Diamond-Dybvig Model of Bank Fragility and its Implications for Current Banking and Monetary Policy

Richmond, Va.

This special issue of Economic Quarterly is devoted to Douglas Diamond and Philip Dybvig's seminal 1983 article on bank fragility and banking regulation, which continues to provide insights for today's policymakers and researchers. The articles in this issue explore the influence of Diamond and Dybvig’s article on subsequent economic research, extend our understanding of current financial phenomena, and examine how the model might be used to evaluate new regulations and banking policies.

You can find the full text of this article and others in the latest issue of Economic Quarterly at: http://www.richmondfed.org/publications/research/economic_quarterly/.

In the First Quarter 2010 issue:

• Introduction to the Special Issue on the Diamond-Dybvig Model by Edward Simpson Prescott
• Bailouts by Edward J. Green
• On the Fundamental Reasons for Bank Fragility by Huberto M. Ennis and Todd Keister
• Inside-Money Theory after Diamond and Dybvig by Ricardo de O. Cavalcanti
• Monetary Theory and Electronic Money: Reflections on the Kenyan Experience by William Jack, Tavneet Suri, and Robert Townsend

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond’s Research Department—Publications at (800)322-0565.

As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District — including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia — to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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