*Associate Professor, Department of Valuation and Investment, Tashkent Financial Institute, Institute of Forecasting and Macroeconomic Research Strategic Planning and Forecasting of Macroeconomic Parameters, Uzbekistan
**Deputy Project Manager for Development, Leader of the Joint Group on Strategic Planning and Analysis and Forecasting of Macroeconomic Parameters, Uzbekistan
Online published on 12 October, 2021.
This paper tires to take up the issue of liquidity shocks that are consequences of deploying deposits to finance illiquid and risky loans for investment in terms of behaviour changes of agents in a short and long period. Due to this many countries have experienced banking crises, bank runs and bank panics. On the basis of the model, this paper examines whether such deposit contracts are efficient and further looks in to possible policies that can potentially prevent the likelihood of bank runs by following Diamond–Dybvig (1983).
Discrepancy, Intermediary, Eliminating, Idiosyncratic, Functioning
