Why Bank Equity Is Not Expensive

Why Bank Equity Is Not Expensive


"Quite simply, bank equity is not expensive from a social perspective, and high leverage is not required in order for banks to perform all their socially valuable functions, including lending, taking deposits, and issuing money-like securities," professors Anat R. Admati, Peter M. DeMarzo, and Paul C. Pfleiderer wrote in a paper presented at the Stanford Finance Forum. (A fourth coauthor, Martin F. Hellwig of the Max Planck Institute, was not present.) Related Links Why Bank Equity Is Not Expensive: www.gsb.stanford.edu