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Cited by 1,334

The DOI matches its Crossref record; 4 of the 4 references it cites were found in a registry or an index.

A Theory of Bank Capital

Open access
Diamond, Douglas W., Rajan, Raghuram G.·2000·The Journal of Finance
DOI 10.1111/0022-1082.00296
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Abstract

Banks can create liquidity precisely because deposits are fragile and prone to runs. Increased uncertainty makes deposits excessively fragile, creating a role for outside bank capital. Greater bank capital reduces the probability of financial distress but also reduces liquidity creation. The quantity of capital influences the amount that banks can induce borrowers to pay. Optimal bank capital structure trades off effects on liquidity creation, costs of bank distress, and the ability to force borrower repayment. The model explains the decline in bank capital over the last two centuries. It identifies overlooked consequences of having regulatory capital requirements and deposit insurance.

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Crossref · 10.1111/0022-1082.00296

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Metadata

Authors
Diamond, D. W., & Rajan, R. G.
Venue
The Journal of Finance
Publisher
Wiley
Published
2000-12
Volume
55
Issue
6
Pages
2431-2465
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/0022-1082.00296
OpenAlex
W3125521824
Cited by
1,334
References
4
FWCI
29.81
Type
journal article
Language
en
Open access
bronze

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CoChat. (2026). Citation check: A Theory of Bank Capital. https://app.cochat.ai/papers/10.1111/0022-1082.00296
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Diamond, D. W., & Rajan, R. G. (2000). A Theory of Bank Capital. The Journal of Finance. https://doi.org/10.1111/0022-1082.00296

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.