Microtheory Seminar Series.
Published: 2 October 2025
28 October 2025. Dr Alkis Georgiadis-Harris, University of Warwick
Dr Alkis Georgiadis-Harris (University of Warwick)
Smart Banks
Tuesday, 28 October 2025, 16:00–17:30
Room 281, Adam Smith Business School
Abstract
Since Diamond and Dybvig (1983), banks have been viewed as inherently fragile. We challenge this view in a general mechanism design framework. Our approach allows for flexibility in the design of banking mechanisms while maintaining limited commitment of the intermediary to future mechanisms. We find that the unique equilibrium outcome is efficient. Consequently, runs cannot occur in equilibrium. Our analysis points to the ultimate sources of fragility: banks are fragile if they cannot collect and optimally respond to useful information during a run, and not because they engage in maturity transformation. We link our banking mechanisms to recent technological advances surrounding ‘smart contracts,’ which enrich the contracting space and can be used to eliminate financial fragility.
Biography
I am an Assistant Professor (Lecturer) in the Department of Economics. Prior to this, I was a Research Fellow in the Department of Economics at Warwick and a post-doctoral researcher at the Institute for Microeconomics and the Hausdorff Center for Mathematics at the University of Bonn. I obtained my PhD from LSE. I am working on economic theory with a particular interest in Information Economics, Mechanism Design and Finance. My recent research explores the effects of modern technologies on economic outcomes.
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First published: 2 October 2025