- Copyright Page
- List of Figures
- List of Tables
- List of Abbreviations
- List of Contributors
- Banking: A Decade on from the Global Financial Crisis
- The Roles of Banks in Financial Systems
- Commercial Banking and Shadow Banking: The Accelerating Integration of Banks and Markets and its Implications for Regulation
- Corporate Complexity and Systemic Risk: A Progress Report
- Corporate Governance and Culture in Banking
- Private Information and Risk Management in Banking
- Creation and Regulation of Bank Liquidity
- The Performance of Financial Institutions Modeling, Evidence, and some Policy Implications
- Technological Change and Financial Innovation in Banking: Some Implications for FinTech
- Community Banking Institutions: Commercial Banks, Savings Banks,Cooperative Banks, and Credit Unions
- Islamic banking: A Review of the Empirical Literature and Future Research Directions
- Can We Improve the Impact of Microfinance?: A Survey of the Recent Literature and Potential Avenues for Success
- Small Business Lending: The Roles of Technology and Regulationfrom Pre-crisis to Crisis to Recovery
- Residential Mortgages
- Shadow Banking
- Modern Central Banking
- Lender of Last Resort: A New Role for the Old Instrument
- Bank Bailouts and Bail-Ins
- Bank Runs and Moral Hazard: A Review of Deposit Insurance
- Bank Capital Requirements after the Financial Crisis
- Market Discipline in Regulation: Pre and Post Crisis
- Competition in the Banking Sector
- Behavioral Economics, Financial Literacy, and Consumers’ Financial Decisions
- Systemic Risk in Banking after the Great Financial Crisis
- Hardy Perennials: Banking Crises Around the World
- Bank Failures, The Great Depression, and Other “Contagious” Events
- Banking Globalization: Cross-border Entry, Complexity,and Systemic Risk
- Banking and Real Economic Activity: Foregone Conclusions and Open Challenges
- Banking in the United States
- Banking in Europe: Integration, Reform, and the Road to a Banking Union
- Banking in Japan: A Post-global Financial Crisis Perspective
- Banking in Africa
- Banking in China
- Banking in the Transition Countries of Central, Southern, and Eastern Europe and the Former Soviet Union
- Banking in Latin America: Developments and Prospects
- Banking in Australia and New Zealand—Geographic Proximity, Market Concentration, and Banking Integration
Abstract and Keywords
Financial innovation has transformed intermediation from a process involving a single financial institution to a chain of transactions broken down among several institutions. Following the Great Financial Crisis, financial intermediation has shifted significantly from banks to non-banks, providing credit in the “shadows” of the regulated banking system. This chapter offers a definition of shadow banking and explanations for its existence, as well as providing an overview of attempts to measure its size. It explains how shadow banking differs from other forms of non-bank intermediation, in particular market-based finance, and discusses why regulators and academics should care about it. Further, the chapter reviews efforts to strengthen supervision and regulation and discusses some policy challenges on the horizon in the context of case studies.
Tobias Adrian is the Financial Counsellor and Director of the Monetary and Capital Markets Department of the International Monetary Fund (IMF). In this capacity, he leads the IMF’s work on financial sector surveillance, monetary and macroprudential policies, financial regulation, debt management, and capital markets. He also oversees capacity-building activities in IMF member countries, particularly with regard to the supervision and regulation of financial systems, central banking, monetary and exchange rate regimes, and asset and liability management. Prior to joining the IMF, he was a Senior Vice President of the Federal Reserve Bank of New York and the Associate Director of the Research and Statistics Group. At the Federal Reserve, he contributed to monetary policy, financial stability policies, and crisis management. He taught at Princeton University and New York University and has published extensively in economics and finance journals, including the American Economic Review, Journal of Finance, Journal of Financial Economics, and Review of Financial Studies. His research spans asset pricing, financial institutions, monetary policy, and financial stability, with a focus on aggregate consequences of capital markets developments. He holds a Ph.D from the Massachusetts Institute of Technology, an M.Sc. from the London School of Economics, a Diploma from Goethe University Frankfurt, and a Maîtrise from Dauphine University Paris. He received his Abitur in Literature and Mathematics from Humboldtschule Bad Homburg.
Adam B. Ashcraft is currently a Managing Director in the Global Risk Analytics Group at Bank of America. Previously, he worked at the Federal Reserve Bank of New York for seventeen years where he held various roles including Co-Chair of the LISCC Liquidity Program, Head of Credit Risk Management, and Research Economist. He holds Bachelor’s degrees in Economics and Mathematics & Statistics from Miami University and a Doctorate in Economics from the Massachusetts Institute of Technology.
Peter Breuer is Deputy Chief of the Global Analysis Division at the International Monetary Fund. In this role he jointly manages a team that analyzes risks to global financial stability, monitors and assesses global market developments, and helps ensure that the Fund takes consistent and well-informed views about financial risks and policies, including in the Global Financial Stability Report. Previously, as Deputy Chief of the Debt and Capital Markets Instruments Division, he oversaw teams analyzing risks emanating from shadow banking and providing debt management advice. He also led the Financial Sector Stability Assessment for Luxembourg. He headed the IMF’s office in Ireland as Resident Representative during the EU–IMF program in 2011–14. In previous roles, he served as Assistant to the Director in the Monetary and Capital Markets Department, and worked in the IMF’s Asia-Pacific, European, International Capital Markets, Strategy and Policy Review, and Research Departments. Policy areas he has covered include capital markets and financial stability, as well as debt sustainability and restructuring issues. Previous country responsibilities include Argentina, Bulgaria, Finland, Hong Kong, Ireland, Luxembourg, Pakistan, Paraguay, Peru, Uganda, United Arab Emirates, and Uruguay. He holds a Ph.D and an M.A. from Brown University, a M.Sc. from the London School of Economics, and a B.A. from Vassar College.
Nicola Cetorelli is a Vice President at the Federal Reserve Bank of New York and the Head of the Financial Intermediation Function in its Research Group. His research has focused on the industrial organization and the corporate finance characteristics of the banking industry and the relationships with real economic activity. More recently he has worked on themes of international banking and on the evolution of financial intermediation. He represents the New York Fed on various Financial Stability Boards’ international working groups. He has published in a number of scholarly journals, among which the Journal of Finance, Journal of Economic Theory, American Economic Review, and Journal of International Economics. He has also written many articles in various policy journals and book chapters. He received his Ph.D in Economics from Brown University and a B.A. from the University of Rome, Italy.
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