Puts in the Shadow
AbstractIn the aftermath of the Lehman crisis, payouts (i.e., taxpayer bailouts) in various forms were provided by governments to a variety of financial institutions and markets that were outside the regulatory perimeter - the 'shadow' banking system. Although recent regulatory proposals attempt to reduce these 'puts', we provide examples from non-banking activities within a bank, money market funds, Triparty repo, OTC derivatives market, collateral with central banks, and issuance of floating rate notes etc., that these risks remain. We suggest that a regulatory environment where puts are not ambiguous will likely lower the cost of bail-outs after a crisis.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 12/229.
Date of creation: 01 Sep 2012
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Postal: International Monetary Fund, Washington, DC USA
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-16 (All new papers)
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