01135nam a22000977a 4500008004100000022001400041245014900055300001800204440005500222500076000277190323b        xxu||||| |||| 00| 0 eng d  a0304-405X  aWarehouse banking / by Jason Roderick Donaldson, Giorgia Piacentino & Anjan Thakorc Jason Roderick Donaldson, Giorgia Piacentino & Anjan Thakor  aPages 250-267  aJournal of Financial Economicsv129 (2)x0304-405X  aAbstract
We develop a theory of banking that explains why banks started out as commodities warehouses. We show that warehouses become banks because their superior storage technology allows them to enforce the repayment of loans most effectively. Further, interbank markets emerge endogenously to support this enforcement mechanism. Even though warehouses store deposits of real goods, they make loans by writing new fake warehouse receipts, rather than by taking deposits out of storage. Our theory helps to explain how modern banks create funding liquidity and why they combine warehousing (custody and deposit-taking), lending, and private money creation within the same institutions. It also casts light on a number of contemporary regulatory policies.