000			02191 a2200157 4500
999			_c26127 _d26127
020			_a9780190919535
082			_a332.1 _bTHA-P
100			_aThakor, Anjan V.
245			_aPurpose of banking _b: transforming banking for stability and economic growth
260			_bOxford University Press _c2019 _aNew York
300			_aviii, 232p.
504			_aInclude Index
520			_aBanks and other financial institutions play a fundamental and yet divisive role in the health of any economy. As lenders they are important to everyone seeking a mortgage or a car loan. As investors they are essential gears of economic progress. And yet when crises hit and the economy tumbles, they are vilified. Is it possible for the banking and financial sectors to both be crisis-free and sustain economic growth that benefits everyone? This is the central question that Anjan Thakor, one of the leading analysts of banking and financial institutions, takes up in this insightful overview of the purpose of banking. He starts with the foundations of banks as safe-keepers of assets and providers of liquidity crucial to a dynamic economy. They manage risk, monitor borrowers, create trust, are providers of information, and facilitate innovation. And yet notwithstanding these essential purposes, the reputation of banks has suffered tremendously in the wake of crises that have harmed the financial sector, the real economy, and many people. The reason, Thakor argues, is that banks have lost sight of their higher purpose, which is tied to their role as safe-keepers of assets and creators of value. These essential economic functions should drive banks' culture, capital structure, and customer relationships. Credit ratings cannot replace relationships, leverage is no substitute for judgment, and the pursuit of profit should not come at the expense of prudence. Thakor shows that while governments can play an important role in creating the environment of banks, including through microprudential and macroprudential regulation, ultimately it is up to banks to improve their culture and align it with their purpose in society.
650			_aEconomic development _vBanks and banking
942			_2ddc _cBK