2020 Syllabus and Readings for First Portions of Course
Finance 590 Seminar on Financial Intermediation
University of Illinois, Department of Finance

Charles M. Kahn

Reading List

January 21
Bank Runs, Deposit Insurance, and Liquidity by Douglas W. Diamond and Philip H. Dybvig
Journal of Political Economy (June 1983, vol.91, no. 3, pp. 401-19)

January 23
The Role of Demandable Debt in Structuring Optimal Banking Arrangements by Charles W. Calomiris and Charles M. Kahn
The American Economic Review, Vol 81, No 3 (June 1991) pp 497-513

Demand Deposits, Trading Restrictions and Risk Sharing by Charles Jacklin
In E. C. Prescott, & N. Wallace (Eds.), Contractual Arrangements for Intertemporal Trade (pp. 26-47). Minneapolis, MN: University of Minnesota Press.

January 28
Financial Intermediaries and Liquidity Creation by Gary Gorton and George Pennacchi,
Journal of Finance. Mar 1990, Vol. 45 Issue 1, p 49-71.

January 30
Insiders and Outsiders: The Choice between Informed and Arm's-Length Debt by Raghuram G. Rajan
Journal of Finance. Sep 92, Vol. 47 Issue 4, p1367-1400.
Notes Part 2

February 4
Demand-Deposit Contracts and the Probability of Bank Runs by Itay Goldstein and Ady Pauzner
Journal of Finance Volume 60, Issue 3, June 2005, Pages 1293-1327

February 13
Market Liquidity and Funding Liquidity by Markus K. Brunnermeier and Lasse Heje Pedersen
The Review of Financial Studies, Vol. 22, No. 6 June 2009, pp. 2201-2238

February 25
Liquidity: A New Monetarist Perspective by Ricardo Lagos, Guillaume Rocheteau and Randall Wright
Journal of Economic Literature, Vol 55, No 2, June 2017, pages 371-440

February 27
Warehouse Banking by Jason Donaldson, Giorgia Piacentino and Anjan Thakor
Journal of Financial Economics 129 (2018) 250-267

March 3
Why Pay? An Introduction to Payments Economics by Charles M. Kahn and William Roberds
Journal of Financial Intermediation Volume 18, Issue 1, January 2009, Pages 1-23

March 5
A Short Introduction to the World of Cryptocurrencies by Aleksander Berentsen and Fabian Schär
Federal Reserve Bank of St. Louis Review, First Quarter 2018, 100(1), pp. 1-16.
An Economic Analysis of the Bitcoin Payment System by Gur Huberman, Jacob D. Leshno, and Ciamac Moallemi,
Columbia University working paper
The Economics of Cryptocurrencies - Bitcoin and Beyond by Jonathan Chiu and Thorsten Koeppl
Working Paper No. 1389 Queen's University

March 12
Optimal clearing arrangements for financial trades, by Thorsten Koeppl, Cyril Monnet and Ted Temzelides,
Journal of Financial Economics, vol. 103(1), 2012, pages 189-203.

March 24
Collateral, Rehypothecation and Efficiency by Hyejin Park and Charles Kahn
Journal of Financial Intermediation Volume 39, July 2019, Pages 34-46

March 26
Market Microstructure Invariance: Empirical Hypotheses by Albert S. Kyle and Anna A. Obizhaeva
Econometrica Volume 84, Issue 4 July 2016 Pages 1345-1404
Market Microstructure Invariance: A Dynamic Equilibrium Model by Albert S. Kyle and Anna A. Obizhaeva
working paper
Continuous Auctions and Insider Trading by Albert S. Kyle
Econometrica Vol. 53, No. 6 (Nov., 1985), pp. 1315-1335
Notes Part 2
Notes Part 3

April 2
Kahn, Rivadeynera and Wong, Eggs in One Basket: Security and convenience of digital currencies by Charles M Kahn, Francisco Rivadeneyra and TN Wong
FRB St. Louis Working Paper

April 7
The Hidden Costs of Strategic Opacity by Ana Babus and Maryam Farboodi
2020 NBER working paper

April 9
The Market for Conflicted Advice by Briana Chang and Martin Szydlowski
2018 Working Paper

April 14
A model of liquidity hoarding and term premia in inter-bank markets by Viral Acharya and David Skeie
Journal of Monetary Economics, 2011, vol. 58, issue 5, 436-447

April 16
Credit and Identity Theft by Charles M. Kahn and William Roberds
Journal of Monetary Economics, vol. 55(2), pages 251-264, March 2008

April 21
Banks as Secret Keepers, by Tri Vi Dang, Gary Gorton, Bengt Holmström, and Guillermo Ordoñez
American Economic Review, vol. 107, no. 4, April 2017 (pp. 1005-29).