The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 to
Ben S. Bernanke , Douglas W. Diamond , Philip H. Dybvig- “for research on banks and financial crises”.

Modern banking research clarifies why we have banks, how to make them less vulnerable in crises and how bank collapses exacerbate financial crises.

For the economy to function, savings must be channeled to investments.

However, there is a conflict here: savers want instant access to their money in case of unexpected outlays, while businesses and homeowners need to know they will not be forced to repay their loans prematurely.

In their theory, Diamond and Dybvig show how banks offer an optimal solution to this problem.

By acting as intermediaries that accept deposits from many savers, banks can allow depositors to access their money when they wish, while also offering long-term loans to borrowers.

However, their analysis also showed how the combination of these two activities makes banks vulnerable to rumours about their imminent collapse.

If a large number of savers simultaneously run to the bank to withdraw their money, the rumour may become a self-fulfilling prophecy – a bank run occurs and the bank collapses.

These dangerous dynamics can be prevented through the government providing deposit insurance and acting as a lender of last resort to banks.

“The laureates’ insights have improved our ability to avoid both serious crises and expensive bailouts,” says Tore Ellingsen, Chair of the Committee for the Prize in Economic Sciences.

#bloomberg #ben bernanke #bernanke #douglas diamond #philip dybvig #ben bernanke nobel #bernanke economics #bernanke financial crisises #bernanke nobel #bernanke nobel ecnomics #bernanke nobel prize #bernanke nobel winner #business #diamond nobel #douglas diamond nobel #economics #economy #financial crisis #gdnpfpbusiness #gdnpfpnewsuk #gdnpfpnewsworld #nobel #nobel economics #nobel economics prize #nobel prize #nobel prize winner #nobel winner #ukraine #Sveriges Riksbank Prize #pmcbankscam #pmcbank #pmcbankvictims #pmcbankcrisis #yesbank #bankruptcy #bankrun #greatdepression #nobelprize #nobelprize2022 #alfrednobel #dynamite #DEPOSITINSURANCE #dicgc #rbi #federalreserve #usa #indianeconomy #upsc #upscgspaper #upscanswerwriting #JOHN NASH #equilibrium #finance #financeministernirmalasitharaman #financeminister #financeministry #bankcurrentaffairs #bankniftyprediction #bankrecovery #solution #why #what #which #how #howto #whatisupsc #economicalissues #currentissues #currentissuesdiscussion #thehindu #thehinduanalysis #thehindueditorial #economiccrisis #economictimes #indianexpress #indianexpressnewsanalysis


READ MORE HERE : https://www.nobelprize.org/prizes/economic-sciences/2022/press-release/

ALSO WATCH :

EP 09 : DON'T HAVE GOOGLE AD-SENSE ACCOUNT? 3 REASONS YOU SHOULD HAVE IT NOW.
https://youtu.be/ZIbhF14ZzMA

EP-08: THIS IS WHY THE IRANIAN PEOPLE ARE PROTESTING
https://youtu.be/GRMoXPG8Sps

EP-07: ARE YOU A VICTIM OF CYBER FRAUD?? -THE FRAUD STORY-PART-02
https://youtu.be/SDZ7UvU4edU

EP-06 : Rs. 23,00,000/- IN ONE CLICK- THE FRAUD STORY (PART-01)
https://youtu.be/haiwmXep37I

EP-05 : Ocean of Plastic
https://youtu.be/SBQswmtq5pA

EP-04 : August The 15 -A Reality Check
https://youtu.be/a2pWzfUKzmQ

EP -03 :The Pox Story - From the Monkeys to the Next Door
https://youtu.be/4N0zyoTFCAU

EP-02 : Trade Deficit & You-Full Analysis
https://youtu.be/ZL6cMj7gfzU

EP-01 : Digital -Learning OR Divide ??
https://youtu.be/wL5BMuI_tB0