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A fraction α of buyers are retail bank depositors while the remaining fraction are unconventional bank depositors.
For retail bank depositors, there is a probability ρ that the buyer meets a type c seller in the DM, in which case the buyer cannot trade unless he or she has brought currency with him or her.
With probability 1 − ρ the retail bank depositor meets a type a seller in the DM.
In equilibrium, retail banks and unconventional banks offer deposit con- tracts to retail bank depositors and unconventional bank depositors, respectively.
A retail bank offers a deposit contract (kr, c, dr) to retail bank depositors, which requires the deposit of kr units of
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