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【中图分类号】 G648【文献标识码】 B 【文章编号】 1671-1297（2012）10-0112-01
In most models, the large number of bankers makes the industry competitive. Bankers lend and borrow at the same interest rate so as to make a zero profit. However, as we examine domestic market, the industry operates in a pattern much more similar to the monopoly case. In the following model, we examine how a monopoly bank makes positive profit while giving rise to rent-seeking behavior and non-governmental financing.
Ⅰ Setups
In reality, individuals, except for very wealthy ones, can hardly invest in multiple businesses. The business involves risk. The rate of return obtained is as follows.
People have diminishing marginal utility of consumption. U'(c)>0; U"(c)<0.
Ⅱ Monopoly bank
Without intermediation, people use private debt to invest in companies. The expected utility of consumption when old is E(U).
The bank promises a rate of return r. Without competition, the bank will depress r to the lowest rate possible r*, which gives investors the same utility as private debt does.
Because of diversification, the bank gets return of investment at a rate of . Therefore, for each unit of goods deposited, the bank makes positive profit of .
Ⅲ Non-governmental financing
Consider an economy with constant population of people who live for three periods. People are endowed with k units of goods to invest when young and they only consume in the other two periods, by amount of c1 and c2 respectively. People would like to consume in both periods, so
Obviously, if a young man of period t invests in non-governmental funds, which return at the rate of R in period t+2, he will store some goods for consumption in period t+1. Because of competition, non-governmental funds will make zero profit and give all the returns from entrepreneurs to investors.
Then the life-time budget constraint for investors of non-governmental funds is
Assume (c1*, c2*) maximizes welfare in this case.
The young man can also choose to deposit in the monopoly bank, which gives return at the rate of r per period. Then the life-time budget constraint is
Assume (c1**, c2**) maximizes welfare in this case.
For the monopoly bank, the lowest interest rate r** can be met by offering investors the same utility as non-governmental funds. As shown in the table below, we have
So the monopoly bank can still make a positive profit despite the competition from non-governmental funds.
Ⅴ Conclusion
To sum up, a monopoly bank can make positive profit, which is obtained either by the bank itself or by the bank official. Non-governmental financing can shrink the profit of the monopoly bank but fail to eliminate it because of illiquidity. However, marketing of interest rate pricing is still necessary and the rigid banking system needs a reform.
In most models, the large number of bankers makes the industry competitive. Bankers lend and borrow at the same interest rate so as to make a zero profit. However, as we examine domestic market, the industry operates in a pattern much more similar to the monopoly case. In the following model, we examine how a monopoly bank makes positive profit while giving rise to rent-seeking behavior and non-governmental financing.
Ⅰ Setups
In reality, individuals, except for very wealthy ones, can hardly invest in multiple businesses. The business involves risk. The rate of return obtained is as follows.
People have diminishing marginal utility of consumption. U'(c)>0; U"(c)<0.
Ⅱ Monopoly bank
Without intermediation, people use private debt to invest in companies. The expected utility of consumption when old is E(U).
The bank promises a rate of return r. Without competition, the bank will depress r to the lowest rate possible r*, which gives investors the same utility as private debt does.
Because of diversification, the bank gets return of investment at a rate of . Therefore, for each unit of goods deposited, the bank makes positive profit of .
Ⅲ Non-governmental financing
Consider an economy with constant population of people who live for three periods. People are endowed with k units of goods to invest when young and they only consume in the other two periods, by amount of c1 and c2 respectively. People would like to consume in both periods, so
Obviously, if a young man of period t invests in non-governmental funds, which return at the rate of R in period t+2, he will store some goods for consumption in period t+1. Because of competition, non-governmental funds will make zero profit and give all the returns from entrepreneurs to investors.
Then the life-time budget constraint for investors of non-governmental funds is
Assume (c1*, c2*) maximizes welfare in this case.
The young man can also choose to deposit in the monopoly bank, which gives return at the rate of r per period. Then the life-time budget constraint is
Assume (c1**, c2**) maximizes welfare in this case.
For the monopoly bank, the lowest interest rate r** can be met by offering investors the same utility as non-governmental funds. As shown in the table below, we have
So the monopoly bank can still make a positive profit despite the competition from non-governmental funds.
Ⅴ Conclusion
To sum up, a monopoly bank can make positive profit, which is obtained either by the bank itself or by the bank official. Non-governmental financing can shrink the profit of the monopoly bank but fail to eliminate it because of illiquidity. However, marketing of interest rate pricing is still necessary and the rigid banking system needs a reform.