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Shadow bank monitoring

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Abstract

We provide a framework for monitoring the shadow banking system. The shadow banking system consists of a web of specialized financial institutions that conduct credit, maturity, and liquidity transformation without direct, explicit access to public backstops. The lack of such access to sources of government liquidity and credit backstops makes shadow banks inherently fragile. Shadow banking activities are often intertwined with core regulated institutions such as bank holding companies, security brokers and dealers, and insurance companies. These interconnections of shadow banks with other financial institutions create sources of systemic risk for the broader financial system. We describe elements of monitoring risks in the shadow banking system, including recent efforts by the Financial Stability Board.

Suggested Citation

  • Tobias Adrian & Adam B. Ashcraft & Nicola Cetorelli, 2013. "Shadow bank monitoring," Staff Reports 638, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:638
    Note: For a published version of this report, see Tobias Adrian, Adam B. Ashcraft, and Nicola Cetorelli, "Shadow Bank Monitoring," Oxford Handbook of Banking, 2nd Edition (Nov 2014): 378-409.
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    Cited by:

    1. Abad, Jorge & D’Errico, Marco & Killeen, Neill & Luz, Vera & Peltonen, Tuomas & Portes, Richard & Urbano, Teresa, 2022. "Mapping exposures of EU banks to the global shadow banking system," Journal of Banking & Finance, Elsevier, vol. 134(C).
    2. Yi, Minli & Yang, Yang & Lin, Jyh-Horng, 2021. "Affiliated reinsurance and insurer performance under capital regulation," Finance Research Letters, Elsevier, vol. 39(C).
    3. Thomas Lejeune & Raf Wouters, 2019. "A macroeconomic model with heterogeneous and financially-constrained intermediaries," Working Paper Research 367, National Bank of Belgium.
    4. Philipp Kirchner, 2020. "On shadow banking and fiÂ…nancial frictions in DSGE modeling," MAGKS Papers on Economics 202019, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Tobias Adrian, 2014. "Financial stability policies for shadow banking," Staff Reports 664, Federal Reserve Bank of New York.
    6. Kirchner Philipp, 2020. "On Shadow Banking and Financial Frictions in DSGE Modeling," Review of Economics, De Gruyter, vol. 71(2), pages 101-133, August.

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    More about this item

    Keywords

    shadow banking; financial stability monitoring; financial intermediation;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G00 - Financial Economics - - General - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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