Microeconomics of Banking

FROM THE FIRST EDITION: The authors have provided an extremely thorough and up-to-date survey of microeconomic theories of financial intermediation. This work manages to be both rigorous and pleasant to read. Such a book was long overdue and should be required reading for anybody interested in the economics of banking and finance. -- Mathias Dewatripont, Professor of Economics, ECARE, Universite Libre de Bruxelles -- Mathias Dewatripont From the 1st Edition: This book provides the first comprehensive treatment of the microeconomics of banking. It gives an impressive synthesis of an enormous body of research developed over the last twenty years. It is clearly written and a pleasure to read. What I found particularly useful is the great effort of Xavier Freixas and Jean-Charles Rochet have taken to systematically integrate the theory of financial intermediation into classical microeconomics and finance theory. This book is likely to become essential reading for all graduate students in economics, business, and finance. --Patrick Bolton, Professor of Economics, Ecare, Universite Libre de Bruxelles; and CentER, Tilburg University From the 1st Edition: The book is a major contribution to the literature on the theory of banking and intermediation. It brings together and synthesizes a broad range of material in an accessible way. I recommend it to all serious scholars and students of the subject. The authors are to be congratulated on a superb achievement. --Franklin Allen, Nippon Life Professor of Finance and Economics, Wharton School, University of Pennsylvania -- Franklin Allen This is an excellent introduction to the theory of banking. It assumes little prior knowledge but quickly takes the reader to the frontiers of the field. It should be required reading in any Ph.D level course on banking, as also for anybody who has an interest in the theoretical foundations of banking. --Raghuram G. Rajan, Eric Gleacher Distinguished Service Professor, Graduate School of Business, University of Chicago -- Raghuram Rajan At last the profession has an advanced book on the theory of banking. Freixas and Rochet make a real contribution to the profession by integrating a disparate but growing literature on intermediation. They show the role that these institutions play in the economy and the complex nature of optical decision making in an imperfect capital market. The book should be required reading for serious students in the area. Anthony M. Santomero , Richard K. Mellon Professor of Finance, Wharton School, University of Pennsylvania Praise for the first edition: The authors have provided an extremely thorough and up-to-date survey of microeconomic theories of financial intermediation. This work manages to be both rigorous and pleasant to read. Such a book was long overdue and should be required reading for anybody interested in the economics of banking and finance. Mathias Dewatripont , Professor of Economics, ECARES, Universite Libre de Bruxelles Praise for the first edition: The book is a major contribution to the literature on the theory of banking and intermediation. It brings together and synthesizes a broad range of material in an accessible way. I recommend it to all serious scholars and students of the subject. The authors are to be congratulated on a superb achievement. Franklin Allen , Nippon Life Professor of Finance and Economics, Wharton School, University of Pennsylvania Praise for the first edition: This book provides the first comprehensive treatment of the microeconomics of banking. It gives an impressive synthesis of an enormous body of research developed over the last twenty years. It is clearly written and a pleasure to read. What I found particularly useful is the great effort that Xavier Freixas and Jean-Charles Rochet have taken to systematically integrate the theory of financial intermediation into classical microeconomics and finance theory. This book is likely to become essential reading for all graduate students in economics, business, and finance. Patrick Bolton , Barbara and David Zalaznick Professor of Business, Columbia University Graduate School of Business The events of the summer and fall of 2007 underline the importance of the role played by banks in the economy. The Microeconomics of Banking provides an outstanding exposition of the theory of banking. The second edition is even better than the first. Freixas and Rochet are exceptional scholars who have contributed significantly to the field. They have managed to explain banking in a comprehensive and comprehensible way. This book is essential reading for anybody who wishes to understand banking. Franklin Allen , Wharton School of Business, University of Pennsylvania This is an excellent introduction to the theory of banking. It assumes little prior knowledge but quickly takes the reader to the frontiers of the field. It should be required reading in any Ph.D level course on banking, as also for anybody who has an interest in the theoretical foundations of banking. Raghuram G. Rajan , Eric Gleacher Distinguished Service Professor, Graduate School of Business, University of Chicago