Banks - History, Theory, and Regulation

Explore the enduring importance of banks in this comprehensive lecture from Yale University's Financial Markets course. Trace the origins of interest rates from ancient Sumeria to modern times, examining the evolution of banking through Renaissance Italy and 16th-17th century England. Understand how banks solve adverse selection and moral hazard problems, and delve into the Diamond-Dybvig model explaining liquidity provision and bank runs. Learn about deposit insurance, regulatory bodies like the FDIC, and the Basel commission's role in bank regulation. Gain insights into financial crises since the 1990s, including the Mexican and Asian crises. The lecture covers basic banking principles, types of banks, bank theory, regulation, equity requirements, and recent international banking crises, providing a thorough overview of this crucial financial institution's role throughout history and in modern economics.

- Chapter 1. Introduction .
- Chapter 2. Basic Principles of Banking .
- Chapter 3. The Beginnings of Banking: Types of Banks.
- Chapter 4. Theory of Banks: Liquidity, Adverse Selection, Moral Hazard.
- Chapter 5. Bank Runs, Deposit Insurance and Maintaining Confidence .
- Chapter 6. Bank Regulation: Risk-Weighted Assets and Basel Agreements .
- Chapter 7. Common Equity Requirements and Its Critics .
- Chapter 8. Recent International Bank Crises.